Rasing money through equity with HSBC? Please help

jgallcash

I'm trying to help my mum sort out some finances as she owes £8k to various cards. My mum has a fairly bad credit record in terms of late payments but there are no defaults on her report and never a late or missed payment for the mortgage. This is often due to paying things at the post office and not through direct debit as opposed to not willing to pay the debts.

I live 250 miles away so helping her can be difficult at times.

Her house is worth approx £100k and her current amount owing on the mortgage is £46k she is currently on the HSBC SVR.

We need to raise an extra £8k which would take a remortgage to £54k ( LTV= 54% I think) Now I have discussed these issues with a broker and have sent a copy of her credit report through. He says that it will be a near prime mortgage probably in the region of 6-8% for a fixed rate of 3 years.

We haven't yet given him permission to do a credit search as i wanted to get some impartial advice before hand.

I have found that HSBC will allow customers to get extra borrowing from the following page:
http://www.hsbc.co.uk/1/2/personal/mortgages/borrow-more/fixed-rate;jsessionid=0000A7cPeV543oRihOH381TSTFE:12ntf1n0a

We are looking at the 5 year fix with no booking fee and maximum LTV of 75% which is advertised at a rate of 6.09%

Other than any general advice My questions are mainly:

1. Does anyone have any experience of raising more cash through HSBC recently using equity with a poor credit history?
2. Will HSBC do a new search despite my mum being a customer or will the LTV being a fair bit under 75% mean that they will change the rate fairly simply?
3. Are they likely to deny my mums application due to her late payment for other debts (credit cards)?
4. Should we at least speak to HSBC (and risk having application denied) before using a broker to search for a deal which he describes as near prime?

I'm sorry if this seems rambled somewhat - I could talk forever about circumstances but wanted to try and stay to key facts. If there is any more i9nfo that may help please do let me know.

As ever I really appreciate you taking the time to help out. :money:

Conrad

Yes try HSBC although I suspect they will decline.

Yours mums age will have an impact here, and a term into retirment may trigger the request for pension documents, although there are ways around this with certain lenders.

I lways try prime lenders first before reverting to sub prime options.
The broker you spoke to should be doing this too. Don't let him prejudice your Mums case by declaring late payments AS IT IS NEVER CERTAIN IN THE EARLY STAGE WHETHER OR NOT LATE PAYMENTS ARE DEFINED AS SUCH AND REGISTERED!

Leave it to the lenders searching systems to establish whether any lates show. Quite often they don't.

Keep in mind you'll be adding unsecured debt into a secured enviroment so according to classic regulatory rationalle that in theory puts the home at greater risk of repo (although in practice it tends to mean lower overall outgoings and in turn therefore means repossession is actually less likely).

HSBC can be very slow. I'd do it over the phone if I were you. Perhaps your mum could give permission for you to act for her.

Good luck

jgallcash

Conrad thank you so much for such a swift reply.

We have weighed up the options and are happy that this is the way forward in dealing with the debt.

You raise an interesting point in regards to age.....I believe there was some cap on mortgage terms originally from HSBC (possibly 3 years ago) that the maximum terms was approx 15 years as my mum at the time would have been 46 years old. Obviously she is 49 now.

I would absolutely like to deal with it on her behalf and I know thats what she would like too. How would we go about this? Is it simply calling them and my mother asking that i deal with it on her behalf?

_Andy_

Yes if you ring them she will need to go through security/ID etc, she can then give verbal consent for them to talk to you

jgallcash

I have just got off the phone to them:

no chance of me acting on her behalf as they say even if she signs a third person mandate she has to be there to verify the details (I live 250 miles away)

It seems that they will do all credit scores as well so this might not be a feasible option, although we'll try anyway.

I know that these things need to be thourough so i do not want to rush things. By the same score this is an issue that is causing a lot of stress to my family.

Do you think that we should give the go ahead to the broker to process a credit search in the meantime to come up with some potential options should HSBC fail?

Will the fact that he has to do a search also impede any possible application with HSBC?

My initial feeling is that her credit rating is poor anyhow but I dont want to risk any potential solutions.

Trollfever

No mention has been made about affordability.

You may like to vist the Debt Free Wannabee Board.

jgallcash

Many thanks TrollFever. :money:

After doing the budgets thoroughly, affordability isn't a problem. Without going into personal circumstances around this problem I cannot really explain further. But absolutely the affordability isn't so much a problem.

crabbman2004_2

To Be Honest, I can't see HSBC Approving this for a couple of reasons. HSBC are one of the only Banks in a good enough position to "cherry pick" who they do or don't lend to. I would imagine that if your mother has missed/late payments these will show up and the application will be declined due to fails scoring. Also HSBC are very wary of taking on external unsecured debt from other companies.

This obviously would be the best and cheapest way of doing it, but I don't believe it will be feasable. I would suggest going back to your Broker and seeing what he can do from the whole of the market

jgallcash

Do you think it would do any harm to allow the broker to do the credit search? I know that searches can have an affect on the ability to get credit.

Obviously in this scenario i feel that the damage has been done with the late payments etc but i just want to see what others think about this point in particular.