HSBC trying to make MPPI condition of mortgage

luch_2

Hi all

Hoping for some advice.... My partner and I recently applied for an additional HSBC rate matcher mortgage (we already have a mortgage with them on a tracker) to purchase the rest of our shared ownership property. Initially the mortgage application was declined, for some unknown reason (checked credit report - all perfect) so the mortgage adviser sent it off to their central underwriting unit for checking.

After a week or so, she's now come back to us implying that we will only get the mortgage approved if we take out MPPI. I know we don't have to take it out with HSBC, but are lenders allowed to make this a condition of the mortgage? Does anyone have any experience of this type of situation or advice to give us? I don't really think we need it as we have plenty of savings and secure jobs, but I would be prepared to take out a cheap one just to satisfy them if it means we get this mortgage.

Our experience with HSBC overall has been dreadful, not sure if that's typical - really slow and very pushy with insurance sales etc.

Very grateful for any thoughts....

opinions4u

luch wrote: »

Hoping for some advice.... My partner and I recently applied for an additional HSBC rate matcher mortgage (we already have a mortgage with them on a tracker) to purchase the rest of our shared ownership property. Initially the mortgage application was declined, for some unknown reason (checked credit report - all perfect) so the mortgage adviser sent it off to their central underwriting unit for checking.

After a week or so, she's now come back to us implying that we will only get the mortgage approved if we take out MPPI.

Ask her to put it in writing that if you take the cover you'll get the mortgage.

I know we don't have to take it out with HSBC, but are lenders allowed to make this a condition of the mortgage?

No.

Our experience with HSBC overall has been dreadful, not sure if that's typical - really slow and very pushy with insurance sales etc. Very grateful for any thoughts....

Popular lender due to their competitive rates at the moment, hence the slowness.

_Andy_

As Opinions has said, you don't have to take the product, either with them or another lender.
What exactly was the adviser's wording about it?

dolly74_2

You are right about how pushy they are, its not just HSBC, believe me they all work the same. It's all about getting sales incentive points. I have worked in various banks/financial instituations over the years so know how they are. When i got my mortgage, i basically signed up for everything so the mortgage went through quickly and painlessly and then cancelled them all. They usually have clauses which allow you to cancel without incurring fees if you do so within so many days. Obviously its a sad state of affairs that you have to think that way but i just didnt want any hold ups. The strategy worked and i didnt incurr any fees.
If you do want any sort of protection/insurance it pays to shop around. I used to deal with the RBS and Natwest ones and even though all part of the same insitution, they varied enormously in terms of price and cover and the dearest ones weren't necessarily the best either.

maninthestreet

When I moved my mortgage to First Direct (part of HSBC), last September, they told me they had stopped selling MPPI.

luch_2

_Andy_ wrote: »

As Opinions has said, you don't have to take the product, either with them or another lender.
What exactly was the adviser's wording about it?

Well, it was all kind of implied 'The underwriting team has come back with a couple of questions, they want to know what protection you'll be taking out to cover your mortgage in the event of one of you losing your job, as you'll be taking on a large mortgage now etc etc (it's not a large mortgage btw!).... this is the only thing outstanding now before the mortgage is approved etc'. It just feels unethical, like they are blackmailing us into taking this insurance out.

Anyway, will take Opinions advice and get her to put it in writing (if she ever replies to one of my emails!).

Dolly74, thanks for sharing your experience. I'm exactly the same - just want this to go through painlessly because we already have rest of mortgage with them, and prepared to sign up for this now just to ensure we're able to proceed. I'm assuming I will be able to cancel at some point - although I don't think MPPI is a bad idea at all, so we may well keep it, I just don't want to be forced into it.

Thanks very much everyone :T it's great to get other people's opinions.