Paid the deposit but no longer qualify for mortgage, how to get out of deal?

We had a mortgage approved and offer signed a year ago when we payed the deposit for an apartment in a new development.Now one of us has lost the job. We have been applying for new positions since Feb but not much luck. the completion date is very soon. we are supposed to give payslips for both of us again before wrapping up with purchase but i think they will not approve us again because we no longer earn enough. we legaly HAVE TO buy apartment no matter what- even if no money. what happens, does anyone know what is the procedure then?
Can we opt out due to the situation? (the lost deposit is the least of the evils in this case!)
Can we get our parents to partner with us on this mortgage? (they have no mortgage on their own)

thank you, i'll be looking forward to your replys

What has your solicitor advised?

I would have thought if you had formally accepted the mortgage offer the lender could not withdraw because of loss of employment. As Clubman said consult your solicitor immediately.

Just head off to Australia or somewhere for a few years, let someone else take the hit, apartment is probably only worth half what you paid for it now anyway.

MrKeane said:

Just head off to Australia or somewhere for a few years, let someone else take the hit, apartment is probably only worth half what you paid for it now anyway.

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He He. Just wait for the AAM thought police to arrive.

dewdrop said:

I would have thought if you had formally accepted the mortgage offer the lender could not withdraw because of loss of employment. As Clubman said consult your solicitor immediately.

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The mortgage approval is a year old. All mortgage approvals are time limited. So the bank are entitled to look for updated documentation, and withdraw approval if they feel the mortgagees are not in a position to pay them back.

Hiya you should contact your mortgage broker/the bank and look into the possibility of your parents going guarantor on the mortgage. at the same time if you cannot afford the mortgage payments it is a bit of a no-no.

it may be possible to sell the apartment if the developer consents, but if the value has dropped then you may lose some of your deposit. either way it might be worth looking into.

talk to your solicitor asap

Thank you for your answers, the escape plan to Australia looks like a great idea! Yes, i've called solicitor - the reply was- do not get too upset, wait untill apartment is finished and then we'll talk to develper. We were told that we have to complete the purchase- we know it,we read the contract! to be honest, i did get more feedbeck from you guys than from either solitor or mortgage broker. We want to buy this apartment and really want to make it happen. Gurantor is something i'll explore a bit more.

Ro_Ki said:

Yes, i've called solicitor - the reply was- do not get too upset, wait untill apartment is finished and then we'll talk to develper.

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This doesn't sound good enough to me. Your solicitor should be explaining your options and the implications of each to you. On the other hand s/he may not do this unless you ask.

I thought deposits were paid with a clause regarding mortgage approval? This was the case with me when we were buying our home?

Are you going to be able to meet the mortgage repayments now that one of you has had the misfortune to lose a job and the way things are looking it could be some time before both of you are back in fulltime work?

This may sound stupid, but how can someone be forced to buy a property they simply can't afford. If you have to resubmit payslips to the bank, plus with interest rates rising it is highly unlikely the bank will approve you based on one salary. I thought there was always a clause as mentioned by JJ1982? I can understand that you would be expected to complete the purchase, but how is one supposed to do this if the bank will no longer give them the money? Would the developer be likely to sue? In reality how far would they get with that. I thought losing the deposit would be all that would happen.

OP - I am not questioning you, was just wondering about this myself. I hope things work out for you. Completion may take longer than anticipated and a new job may be found in the meantime.

Yes the developer can sue you if you do not purchase when you have signed a contract to do so. But a developer will probably not sue someone who has no job and no assets as it would be a waste of time.

ClubMan said:

What has your solicitor advised?

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This is a comment which reoccurs alot on AAM and I think it's sound advice, write down questions you have for him/her when you think of one and then when you meet your solicitor, write down the answers. Your solicitor is someone withwhom you must have a certain trust and should be able to disclose almost anything to. Listen to their advice, thats why you pay them those big fee's.

deedee80 said:

This may sound stupid, but how can someone be forced to buy a property they simply can't afford.

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Indeed. Maybe modify this further. How can someone even contemplate buying something they can't affford (note that recent events only indicate that the OP wasn't really able to afford this in the first place)

It certainly wasn't helped by the widespread subversion of discussion on the scale of madness of the Irish asset price bubble.

BronteRe: Paid the deposit but no longer qualify for mortgage, how to get out of deal?
Yes the developer can sue you if you do not purchase when you have signed a contract to do so. But a developer will probably not sue someone who has no job and no assets as it would be a waste of time.

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that is exactly what I thought Bronte so op may get away with just losing the deposit (I know thats not great either )

To be honest, the builder/developer will have the bank breathing down their neck to repay the loan for constructing the development & their bank won't accept "well yer man in No. 23 isn't going ahead so will you just let us off paying you back??" At the very least, you can expect to lose your deposit and many builders are forcing completion of sales.

Yes, to be fair and it's only playing devils advocate, how would the OP feel if the developer was trying to get out of the contract because they had someone willing to pay a higher price for the apartment? (unlikely as that may seem in the present climate) I would prepare to lose your deposit if I were you as the days of the builders being willing to refund deposits because there's someone in the queue behind you are long gone.

Sorry to read about your situation.

You could speak to your lender about putting a parent or two on the mortgage application ie if parents are happy to do so. Are either you or your partners parents working? If so are they earning enough to make up the shortfall? It will also depend on their ages and assets.

Its really up to you and your parents and/or partners parents to decide if this is a worthwhile option. As other posters have pointed out you don't really want to get more involved in this deal if you can no longer afford the repayments. My advice is to think more short to medium term rather than the immediate future.

Best of luck.

Any chance the bank would give you an interest only mortgage until you have two jobs between you? Have you a good relationship with bank?

Probably a long shot though.