Mortgage rejected at last minute - now what?

AndyLiverpoolFC

We're about to move home and were given a mortgage in principle with our current lender (HSBC), had accepted an offer on our house and had our own offer accepted on a new place.

We went to discuss our formal mortgage offer and there appeared to be no problems but was sent to the underwriters as it's 90% LTV.

Today we hear that we can't get a mortgage because of another loan we have with HSBC which stipulates that HSBC cannot lend us any further money until Aug 2011 (12mths after our loan - to consolidate debt - was taken out).

We had intended to pay off this loan with equity from our property so didn't see it to be a problem. Surely no loan = no 12mth conditon? (We thought!)

So we've no chance of borrowing a mortgage with HSBC but apparently we passed affordability/credit checks etc.

We since tried with the Post Office but were rejected almost at the first hurdle. Have a feeling our credit score is good enough for HSBC as our current lender but not with others?

Further applications will further deteriorate our credit score so what other option do we have other than give up?

For info, both earn £32K borrowing 200K on 90% LTV.

GMS

32k each earnings?

Speak to a broker asap. You need to move quick to try to keep the house you offered on.

AndyLiverpoolFC

£32K each yes, combined £64K. Should have been straightforward. We do have a car loan each (of £9K a piece) which will be still outstanding when we've got a new mortgage but that's it.

The HSBC personal loan which is causing the hassle will be paid off with equity. Which is why we thought we'd be fine.

GMS

This is the problem with direct applications. Staff 'selling' the mortgage have no idea of the criteria.

Computer accepts and underwriters say no, leaving clients high and dry. I have had a client recently who has had months of messing with HSBC.

Speak to a broker. There may well be alternatives for you, but without knowing full circumstances I wouldn't like to say.

AndyLiverpoolFC

Thanks. We'll get in touch with a broker in the morning.

Are the Post Office particularly stringent? The rejection from them (immediately) makes me think everyone else will be the same?

GMS

Post Office are strict on lending but so is everybody at 90% LTV.

Have you seen copies of your credit reports? Are there any problems?

The 2 car loans could be hurting you. Did you state them as being repaid?

AndyLiverpoolFC

GMS wrote: »

Post Office are strict on lending but so is everybody at 90% LTV.

Have you seen copies of your credit reports? Are there any problems?

The 2 car loans could be hurting you. Did you state them as being repaid?

I haven't seen copies of our credit reports but would doing so affect our credit rating? It can't be too bad if HSBC said we passed credit rating checks? I might check in future but we've never had any CCJ's, missed payments or anything like that. Always had credit but it's been very manageable.

We were honest about the two car loans in that they'd remain and wouldn't be paid off. This could have been a problem with Post Office but HSBC said that it was fine.

GMS

You can get copies from Experian or Equifax. Statutory reports cost £2 and can be delivered on line immediately.

May have been an affordability issue with Post Office. Did you check affordability calculators before applying?

A broker would need about 20 minutes on the phone to get an understanding of your situation and see any possible lenders.

AndyLiverpoolFC

We checked the PO affordability calculator and it came in at ~£220K so we need £20K less than this.

It said that our application "was outside their lending criteria" which doesn't mean a great deal! Will phone them tomorrow to ask why.

GMS

Post Office and HSBC are cherry picking the best cases because they can.

Get credit reports and speak to a broker. Don't keep applying to lender after lender because this will harm your chances even further.

AndyLiverpoolFC

GMS wrote: »

Post Office are strict on lending but so is everybody at 90% LTV.

Have you seen copies of your credit reports? Are there any problems?

The 2 car loans could be hurting you. Did you state them as being repaid?

Thanks again, it didnt seem to be cherry picking from HSBC, just this silly "no further borrowing for 12mths" that's held us back. Everything else seemed fine.

Will speak to a broker and hopefully he can let us know the best place to try next for a 90% LTV.

Cheers.