HSBC Mortgage - AVOID AT ALL COSTS !!!

Margin_Walker

The decision to reject or approve an individual mortage is made by an underwriter. Their sole concern is the risk to the bank of any lending that they approve and not the profitability of the loan. Decisions of that nature take place a lot higher up the food chain and will not have been applied to your application.

I am sorry that you seem to have had a bad experience in this case and I would obviously advise setting up an overpayment when it does complete.

opinions4u

didnof wrote: »

we want to sell it in 3 years

So why the hell are you being so arsey about the term then?

real1314

OP, Sometimes it's not what you say, but what you don't say.

You started with a post about not getting the deal you wanted on an £87k house. You said you could afford it but you didn't say anything about your/partners salary. You've still not said how secure that salary is.

You also don't mention why a couple with an £87k salary would want to live in an area where a 4-bed house can be had for £87k. That's an odd thing to do in general.

Now, the thing is, I'd suggest an £87k house must be in a fairly bad area, so the value might fluctuate a bit more than other places, so I'd think maybe a 10% deposit might be a bit low?

All these sort of issues, which might well have influenced the deal available, have not been mentioned at the start of your post. People can only give advice with a full picture, and people should also only heed warnings with a full picture.

didnof

opinions, the reason we were arsey about the term is that when the three years are up we will have less capital paid in the our mortgage than the one we wanted.

i admit, it is unsual to go for a low value house, but the it should be priced closer to £135K (price it was bought for in 2006) and it is comfortable... location is fine, its in a rural area with a small town population of around 8000. it was an oppoprtunity too good to miss and will give us a chance to save up for the move we want. i deliverately didnt talk about salary as i dont like to, just said we could confortably afford it, but people kept insisting we didnt get it due to £££ so thats why i discussed it.

_Andy_

didnof wrote: »

the problem is that they rejected us in the first place because they werent making enough money out of us.

No, they declined it because you didn't pass their affordability model.
Worth stating again - just because you (or anyone else) thinks its affordable isn't relevant - its up to the lender.
If you really believe they declined you because they weren't making enough money out of you (which, again - is not the case), then feel free to complain to them - they will state what has been said on here.
You then have the right to go to the Ombudsman who again will say the same thing.

vaporate

_Andy_ wrote: »

No, they declined it because you didn't pass their affordability model.
Worth stating again - just because you (or anyone else) thinks its affordable isn't relevant - its up to the lender.
If you really believe they declined you because they weren't making enough money out of you (which, again - is not the case), then feel free to complain to them - they will state what has been said on here.
You then have the right to go to the Ombudsman who again will say the same thing.

More like 'ideal rip off customer model'. Not enough profit for them basically.

opinions4u

didnof wrote: »

opinions, the reason we were arsey about the term is that when the three years are up we will have less capital paid in the our mortgage than the one we wanted.

There would be less than £6k in the sums though, and this could have been achieved through overpaying, saving or a mix of both.

As a former mortgage underwriter I can understand why they have been cautious in their approach to this type of lending.

The little bits and pieces don't quite add up. That doesn't mean there is necessarily something wrong with the application, but it does raise concerns.

I would certainly have been asking myself if I genuinely believed the applicant was intending to live in this property. If I wasn't convinced I would either be asking more questions or declining.

pixelina

A similar thing happened to me, and I also got the impression that it is a way for banks to secure a bigger profit by pushing you to a longer term mortgage, although you can afford a shorter term. They are claiming it's all down to the affordability model, while my hsbc adviser admitted that they can afford to cherry pick.

In response toOpinions for you:
"Has it crossed you mind that the adviser had a good understanding of the affordability model and was trying to help?"

From my experience, independent advisors start off by considering giving you the shortest term you can afford, while mortgage lenders start off by suggesting the longest term possible. I can only assume they both understand the 'affordability model' but interests are different.

The only posts backing HSBC in this thread seem to come from underwriters, and not from customers.

opinions4u

pixelina wrote: »

A similar thing happened to me, and I also got the impression that it is a way for banks to secure a bigger profit by pushing you to a longer term mortgage, although you can afford a shorter term. They are claiming it's all down to the affordability model

If their lending is generating an arrears/repossession rate that is lower than their competitors, it makes the cost of raising money cheaper for them. This will, it turn, drive additional profit for the business. It is fair and logical. If longer term lending improves affordability (across the whole term of the loan) then I'm all for it.

If the customer chooses to overpay, as I believe the T&Cs of an HSBC mortgage allow, then this reduces profit for HSBC. But they do give the customer this flexibility, so I am struggling to see what the problem is.

while my hsbc adviser admitted that they can afford to cherry pick.

They can. Why take additional risks when you can obtain your desired market share by accepting only the cleanest cases?

In response toOpinions for you:
"Has it crossed you mind that the adviser had a good understanding of the affordability model and was trying to help?"

From my experience, independent advisors start off by considering giving you the shortest term you can afford, while mortgage lenders start off by suggesting the longest term possible. I can only assume they both understand the 'affordability model' but interests are different.

I would expect an experienced HSBC adviser to have a better understanding of the HSBC affordability model than a broker who is, most likely, unable to place business with HSBC and therefore wouldn't deal with the bank.

The only posts backing HSBC in this thread seem to come from underwriters, and not from customers.

I don't really see a huge raft of customers complaining in the thread either.

Bottom line is that mortgage lending is a commercial enterprise, the market is unstable at the moment and HSBC have done a terrific job of managing arrears/repossession levels and write-offs in the UK when compared to many of their competitors.

Perhaps if other British banks had done the same the nation wouldn't be in the mess it's in today.

Jonbvn

didnof wrote: »

we have been in new positions for around a year so we do not have great savings.....

And therein lies the answer to why HSBC see you as a higher risk than you expected, and were not happy to lend to you on the original terms!