HSBC Revised Mortgage!!! HELP!!!!!

mystickhan

Hi,
I want to purchase a new build apartment with a selling price of £141,995. I have then got an incentive price after a bargaining session form the developer of £120,000. I have a £20,000 deposit and I needed a mortgage for £100,000. The actual purchase price will be £141,995 but i will only pay £120,000.

I have got a mortage sorted with HSBC on a tracker for £100,000. I went into branch and spoke with their mortgage manager and told her i needed £100,000. She said HSBC do 75% LTV meaning the property had to be valued at £133.500 for me to be able to get the £100,000.

I paid for the surveyor and the property was valued at £141,995 which is more then needed.

I recieved my mortgage offer from HSBC saying valuation approved etc and sign the offer for £100,000 which i did.

Yesterday i had a letter from HSBC saying we are aware of your incentive price and we have revsied your mortgage to £90,000!!!!

I called the mortgage centre and a lady told me "O it says in your mortgage offer that its 75% of either the valuation for purchase price which ever is lower". I asked her to point it out to me so i could find it in my mortgage offer... Her reply was " It dosnt actually say it in yours" and "I will have to pass this over to the incentive dept" and "Thats the reason given on screen".

I then explaind that the MORTGAGE MANAGER who opend this for me only said 75% of valuation and purchase price was not relivent! also that if that was the case then surly a MORTGAGE MANAGER will know that there was no way i could have got £100,000 if i was paying £120,000. I told the MORTGAGE MANAGER this when opening and she said we will go by the book price as thats the selling price and purchase price on all documentation!
Ive read all paperwork and booklets HSBC sent me aswell as website and all it talks about is 75% of LTV not the purchase price...

Even so.. On all development paperwork it states purchase price as £141,995 and all my solicitors letters to. Breify spoke to my solicitor and he says there is no reason how that incentive price should bother HSBC as they have valued the property at £141,995 and thats they said subject to valuation on the mortgage which they approved.

Please advise :-) Il be calling them back on monday to speak to this incentive dept... and complaints i think 2.

And finally..
that mortgage offer i have signed for the £100,000 is binding? as much as if i didnt pay my mortgage they would be the first to say you agreed to the repayments so we are taking your property off you as your signed the agreement...???HSBC Revised Mortgage!!! HELP!!!!!

missyelliot123

Hi

I'm afraid I can't really offer any advice, but we did have a similar problem.

We paid £190k for our house with the vendor paying the stamp duty. We went for a 90% LTV and were offered £171k from HSBC. However when solicitor advised vendor paying stamp duty, they reduced their offer to £169290 (190,000-£1,900 x 90%). We were told by HSBC that it is their standard practice to deduct any incentives from the purchase price. They would not move and as it was not a big amount I did not take it futher. Had to borrow money at the last minute from a relative.

Hope things work out

GDB2222

I can't, for the life of me, see the problem with what the lenders are doing. In fact, they ought to have been doing it years and years ago. In one case, the actual purchase price is £120k, and the lenders on a 75% LTV mortgage are only lending 75% of actual purchase price. Good! They are learning, albeit belatedly, not to get screwed. Similarly with the stamp duty incentive.

So, the only possible complaint is that this may not have been explained properly in the literature. I can't comment on that without going through every bit of paper that you ever received from the lenders. Maybe you are right? Complain, and see what the answer is. Maybe, they'll alter their paperwork. Maybe, if you are very lucky, they'll refund your valuation fee. I am virtually certain that you won't bully them into giving you the mortgage you want, though.

Good luck.

bubblesmoney

the builder is deliberately trying to get higher sale price registered on the land registry and hopes that other properties tey sell on the same development get a better sale price because of this rigged sale they hope to get registered at higher than actual sale price.

the actual sale price is the price on pays minus all incentives.

i think LTV means loan to value and not valuation. and by value i mean the actual sale price or valuation which ever is lower. otherwise it is easier for people to bend the rules to achieve a LTV what they wouldnt normally have achieved.

what the LTV / lending criteria should be is the banks perogative as they are the ones lending the money. wouldnt you set ur preferential criteria if it was your money that was being lent???

it is precisely these dodgy backhanders as incentives and rigged valuations that landed the banks in shitscreek (that apart from their own financial wizardry attempts ofcourse)

ur option would be to get the developer to drop their selling price to what ever suits ur deposit regarding LTV to rescue the sale. that wuld suit u better in the long run too rather than get hsbc to lend at an LTV based on a up in the clouds valuation.

DO u think there is any lack of valuers out there who dont value properties higher than they are actually worth???? (if the buyer gets incentives to pad up the valuation on paper then is it not 'theoretically;) ' possible for valuers to get backhanders from developers as an incentive to give higher valuations on newbuilds???). the property i bought for 135k had a valuation from sellers valuer at 175k and 'my' valuer was trying to tell me i was getting it for less than actual value! but i had to tell my valuer that for me it was worth 135k and even then i was worried i was paying too much as i could find other similar properties for 'almost' the same price. just having the initials 'RICS' on the letterhead mentioning the valuation means didly squat to me. at the end of the day the property is worth what is actually paid at the time of purchase minus any incentives and even then what is actually paid might be too much in a falling market so the banks have to be careful. for all u know they might be saving u a packet if this helps u bargain again with the developer and get a lower sale price

mystickhan

My issue is this...

Why would i have gone all the way throught this knowing i would only get £90,000 regardless of the valuation.... Had i been told that i would only be able to get £90,000 regardless of the valuation due to the purchase price i would have known that it wasnt going to work out.

bubblesmoney

mystickhan wrote: »

My issue is this...

Why would i have gone all the way throught this knowing i would only get £90,000 regardless of the valuation.... Had i been told that i would only be able to get £90,000 regardless of the valuation due to the purchase price i would have known that it wasnt going to work out.

i cant understand why u cant go back to the developer and mention that the mortgage didnt come thru because the incentive changed the LTV and ask them to decrease the sale price so that it suits ur deposit / LTV criteria. u never know they might drop the price further if their goose is getting cooked.

mystickhan

so if i have 20,000 deposit.... and that needs to be 25% of the purchase price

what would be the purchase ammount where my 20k is the remaining 25%???

poppysarah

The house is being sold at 120k
So your mortgage can only be 75% of that - ie: 90

Why would they value it for more than you're buying it? Your "incentive" rate is the same as everyone else is getting.

Get them to lower the house value until your deposit is 25%.

stevros

With 75% LTV
A selling Price of £120k gives £90k mortgage £30k deposit
A selling price of £80k gives £60k Mortgage and £20k deposit

if you only have £20k deposit then you can only afford a £80k house with a £60k mortgage.

Simple really you need another £10k of saving to be able to afford that house.
have a look and see what is on the market for £80k now that you can afford if thers nothing, then carry on renting and saving

.....or wait a couple years when you have more savings and that flat will probably be less than £80k any way

lincroft1710

Unless you can raise £30K, an extra £10K over your deposit, then you can't buy the flat. Even if you renegotiate purchase price to £100K say, on a 75% LTV, you will only get £75K and still need another £5K. The flat CANNOT be worth £141,995 if you are only paying £120K for it, it is worth £120K, so HSBC will only lend £90K.

There is logic behind this - if they had lent you £100K and had to repossess in next year or so, because of projectd property price fall, probably wouldn't get all their money back. On £90K have got more chance.

brit1234

mystickhan wrote: »

Hi,
I want to purchase a new build apartment with a selling price of £141,995.

:rotfl:

In whose opinion. Newbuilds are extremely overvalued and poorer quality than conventianal properties.

The others are right, haggle the developer down to £80K or save an extra £10k deposit. Don't blame the mortgage providers because they want you to take more of the risk on a overvalued and rapidly depreciating property.