self employed mortgage declined by HSBC- now appealing

barksdale

The banks can only judge based on the facts at their disposal. Last year you earned a lot less than the year before and as an employee rather than as a self-employed contractor. I believe you when you say that it's because you went travelling, but the bank can't afford to take your word on it. You could just as well have been unable to find enough business.

What the bank wants to see is stability. They need concrete proof from you that your business is sound. Look at the statistics and you'll see that most small businesses fail within the first few years, so banks are justifiably cautious about lending to the self-employed. You obviously earn good money, but you're no good to the bank if you earn 75k one year and are broke the next. Unfortunately, your year of travel has made it look to the banks like you're circling the drain and they have no real assurance that this year will be any better.

If I were you, I'd be looking to build up a couple of years earning the same sort of money, and crucially under the same legal structure. Choose to be an employee or to be self-employed and stick to it.

RX-78

Thanks 2010omnia!

I'm not sure which bit helped but we tried to do push from all avenue - we had several meetings with the premier account manager (who went to speak with other people), accountant from my new business partnership disclosing the books and showing stable trading for many years, getting the current business whom I sub-contract from to comfirm the contract, showing statements from my current mortgage lender etc etc

Oh and several boxes of valium to stop me loosing temper whenever I called HSBC and told "should be done by today" on daily basis helped too!

VIGILANT22

Can't believe all these amount of people insisting HSBC should give them a mortgage!!

Dan_1976

Vigilant if you dont ask you dont get, shout you get heard!

Financial services is working with tick box systems, when your in FS you view it more that way.

Trust me, when you get out of FS you see its all a load of kak, and there is more to life!

Before you start, if it was not for the "crunch" I would still be in it, but I am never going back!

VIGILANT22

Dan_1976 wrote: »

Financial services is working with tick box systems, QUOTE]

Really!...........:T

Dan_1976

I know you know it, but FS never see's past this, unless it wants to or you shout at them!

Lowest form of wit etc

VIGILANT22

2010omnia wrote: »

Congrats RX-78. I'm still waiting for my long appeal!!! But everyone who is helping me in HSBC all said they are strongly supportive to my application. QUOTE]

I'm sure everyone who is in contact with you is "supportive" of your application...It is much easier to tell you this and keep you satisfied/quiet than tell you the opposite and then have to deal with an irate client.

HSBC advertise headline rates to draw people in and then cherry pick from there...commitment to these deals could be "costing" them therefore they have to be selective on take up rate...I somehow feel profession/trade also plays a part in the elimination process........

melnatlola

2010omnia wrote: »

I'm self employed in my early 30s. been in a mixed of PAYE and Ltd in the past 4 years.I'm a qualified accountant working in risk management consulting area.

yr1 49k (PAYE)
yr2 52k ( Ltd, profit)
yr3 21k (PAYE, only worked 4 months as I took time off for travel)
yr4 74k ( Ltd, this is 09-10 projection on Ltd, a 3 month rolling contract -been extended for 4 times with the same employer as this is the common practice and the contract is likely to be extended due to the nature of my work- risk consulting)

no debts, have 2 credit cards but paid off every month.
all accounts (business and personal accounts are with HSBC for many years)
Mortgage amount :£165k, LTV 45%
mortgage : 1.99% life tracker for 25 yrs fee 999 monthy payment £740.00
Premier account holder

provided last 4 years tax returns , proof of employment.
mortgage manager accessed my detail and was sure no affordability issue,
no credit issue.
but she needed to send my case for the underwriter due to my self employed status.

it got declined by the underwiter on : income unsustainable....

My mortgage manager said my case has been sent for appeal will need to wait as they were confident the reason of decline is unreasonable.

Has any one experienced anything like this , shall i try other banks ( called Halifas, seems they can provide AIP over the phone just based on information provided and can submit full application for me over the phone then to proceed for survey etc etc- a bit too good to be true?!!)

Shall I wait for the reply of HSBC or shall I apply for other banks while waiting ,knowing that it will leave a credit check print on my file.

your advice is highly appreciated!!! thanks !!

hi,
HSBC can be extremely difficult ..perhaps best idea is to shop around really.
I was with HSBC on a self-employed basis for a number of years obeying all the rules .and all borrowings secured.I was under an Enterprise Manager for a few years paying for advice etc.

Eventually things went slightly difficult and I was forced really to take further borrowings on an equity release basis.I should have taken a different stance with the Bank,but,regretfully you feel quite intimidated by your position financially and therefore see the recommended route as the way forward.

Some months later I lifted the Birmingham Newspaper to find out that the Lady Business Manager of the Shirley Branch of HSBC had just gone to prison for embezzlement of £152,000.(She was my business manager and advisor)

Some years have gone by and am thinking of taking legal advice on the situation..I believe that most people would consider a Bank Manager giving you and guiding you financially was giving you the right advice ......I would like to think so ...wouldn't you????

The question is do you think that the advice given and borrowings suggested/authorised by this manager have been compromised as the result of her criminal activities.Would you challenge this borrowing on the basis of credibility???

What do you think about HSBC now...are they a credible and honest establishment.I think you have to challenge them and appeal IMO they don't do you any favours.

Any advice or comments on this one??

VIGILANT22

This is not the place to seek advice

BargainMad_3

The poster IS I think looking for advice - so here is my take.

The HSBC underwriter will be "looking ahead" at the situation not at the "here and now".

In the next few years we will have....

Interest rate rises;
Cuts in the public Sector that will have a knock on effect for those in the private sector that supply services to them;
More foreclosures as people struggle with these two aspects which will impede house price growth and could lead to further falls in price.

As a self employed person you could easily lose contracts whilst your mortgage escalates as the base rate goes up (and the value of your house falls).

And what if you lost all work ? No redundancy pay for you.........


HSBC can afford to "cherry pick" customers for its lifetime trackers. I do sympathise with you as it is very frustrating if you have a perfect credit record and a low LTV. But it is the self employed status and the future predictions that is scuppering your mortgage being approved.