HSBC have created a crisis

frontera2_2

Ok - Here's our story, and hopefully someone can give me some advice as to what to do because I'm going out of my mind with worry.

We currently have a mortgage with HSBC which we've had since 2005 and have never had any problems with it whatsoever with all payments being made on time etc.

Back in August, my wife and I decided that we wanted to move to a bigger home so we could look at starting a family etc. and found our dream home, we liked it so much we put an offer in on the very day we saw it.

The vendors were prepared to accept our offer but, because we had a chain (ie needed to sell our existing property first) they wouldn't take the house of the market until we were in a position to proceed.

Because we didn't want to run the risk of losing our dream home we rang HSBC to see if it was possible to have a new mortgage for the new house whilst keeping our existing mortgage going on our current house until we sold it. After speaking with his superiors, the advisor on the phone said that this would be fine and ran through an application, I repeatedly explained what we wanted to do and was told this would be fine.

Anyway, moving on some 6 weeks. Our Mortgage application has been accepted, we have the formal offer in our hands and indeed this has been provided to our solicitors. The searches have been done along with the valuation, everything is on track and we are nearing completion...

I then decided to ring HSBC to find out exactly what the arrangements were with our exisiting property and was told that everything would be fine but to be absolutely certain, they would get someone to call me.

Ten days later, my working day was shattered when I received a call from HSBC's Mortgage Service Centre stating that I couldn't, in fact, do what I had previously been assured I could eg keep my existing mortgage going whilst having a new one.

After arguing quite strongly that I had been told otherwise, I was assured that a supervisor would look into this and I duly received a call a few days later after they had listened to my original conversation.

Apparently one of the problems is that my current mortgage can't be ported across to the new property with the existing one in place as it's a preferrential rate. Therefore the only option is for me to go through a new application for a mortgage of £124,000 for the current mortgage seperate to the £252,000 for the new house that's already been agreed.

Whilst we can both afford it, my wife and I earn £40k a year each, I'm very doubtful that HSBC will now agree to this, despite previously assuring me that I could.

With no buyer immediately in sight for our current house, I can see this all going down the drain and us losing our dream home together with all the money that has been spent so far.

Any ideas on what we could do?

TEDDYRUKSPIN

From just guessing on your total salary and new property, you WILL NOT be able to have this mortgage in the first place, unless the second property is sold.

This is not feasible in HSBC case - HSBC scrapped bridging loans roughly in 2006-2007 and therefore, the above reason - THIS SHOULD BE DECLINED.

Now.... solution:

(1) Get your money back - how? The survey fee will not be refundable. You will have to make a complaint and I suggest you grieve your ange in writing. Send this off - recorded delivery! Explain the situation and the compensation you want.

(2) The answer they will give you, will be that they will hold the application for 6 months until you find a new property. GET YOUR MONEY BACK instead. Stand your ground. This will take roughly 16 days.

(3) It may take 4 weeks until you obtain a decent compensation - do not accept compensation monies until your are satisfied this covers all costs.

(4) Decline by the 4th week, you will take it to the ombudsman - unlikely to get this far.

---

(5) You will need to seek a decent independent financial adviser who will seek a lender - you are looking for the following: a new mortgage application and a bridging loan!

Problems:

If you take out option (5) - you have one major problem. If the house never sells, you will still have the bridging loan which the interest can be as high as 8% to 12%. You have been warned. This rate follows the banks lending rate and not the Bank of england rate! Major warning!!!!!

Final option:

You may want to look at changing your existing house - mortgage to a buy-to-let mortgage and rent that out. Then obtain a brand new mortgage for the new property.

YOU HAVE BEEN WARNED. Both options have disadvantages!

23rdspiral

gosh! what an aweful position to be in! i'm shocked HSBC would agree and let you get so far then take it all away.

we are nearly but not quite in a similar position (with HSBC, great house seen, ours not sold, and wondering if buytolet on our existing house is a good idea.)

Please let us know what HSBC say to your complaint - i'm guessing you will make one!

bacard1

Sorry not much to do with mortgages. I can not see in the current climate a main stream lender giving you enough cash, unless your earnings would cover both mortgages. Seeing as hsbc have said no i also doubt (like the above) this is the case. If you want that new house, you are going to have to price your current house at a price that brings in the viewers (i.e a good buy).

good luck

getmore4less

frontera2 wrote: »

Apparently one of the problems is that my current mortgage can't be ported across to the new property with the existing one in place as it's a preferrential rate. Therefore the only option is for me to go through a new application for a mortgage of £124,000 for the current mortgage seperate to the £252,000 for the new house that's already been agreed.

Why do you need to port the existing loan or renew it? that does not make sense. if they have agreed the new loan then you should be able to go ahead without touching the existing loan.

What were you expecting to happen?
What did you think you were applying for?

I can see a few senarios,

The obvious one.

Keep the existing mortgage get a new one on the new place on current lending terms then redeem the old one on selling.

If trying to preserve a good rate than that has a couple of options,

Port the existing loan(top up if needed) and get a new loan on the old place and redeem on selling, only practical if they have any deals with no penalties.

Get a new mortgage on the new place, then port the old one over when selling and reduce the amount of borrowing on the new one.
This is probably not possible. can you port mortgages to houses you allready own?(anyone know)

You can allways try another lender for the new house mortgage if you think your salaries cover the total borrowing but £366k on £80k income is over 4.5 times income so might not be easy.

socrates

This is a classic example of HSBC at the moment - the left hand does not know what the right hand is doing.

The real problem is the Indian Call Centre are completely useless - besides giving you a balance they are good for nothing.

I regularly complain to HSBC and each time I get a copy of the conversation pulled and provided to me on a CD - they HAVE to provide you with this by their own regulations.

Follow the advice of others especially TEDDYRUKSPIN - but get a copy/copies of all your conversations - they do pay compensation - I would go for every penny including the survey as you would not have gone ahead had you known the true story.

The simple fact is if you want anything at HSBC these days that is slightly complicated visit a branch.

Rick62

Like Getmore4less I'm totally confused what you thought you were doing. How were you expecting to both port a mortgage and keep the same mortgage on the old property?

maninthestreet

£124,000 mortage for your current property, plus £252,000 for the new property = £376,000 total borrowing. That's 4.7 times your combined salaries. I'm surprised HSBS even considered this. The solution is to sell your current property, just like the rest of us did when we moved up the property ladder.

infotouch

ok this is fine

TEDDYRUKSPIN

The disc will cost you £15 and will take roughly 30 days to receive. This will include all calls, statements etc. You will expecting a wait.

Just send a letter in - or hand it over to a branch. You do not have to book an appointment. Just look furious! Guaranteed to work. Trust me. Go back to the branch that dealt with this enquiry.

Good luck.

ILW

Why not just price your existing house so it will sell?
Cannot see what the problem is.