HSBC Mortgage Approval

jb79_2

Hi, first time poster to these boards and I hope you can help.

My partner and I, 31 and 26 respectively, are looking at buying our first home and we have obtained an agreement in principle off of HSBC's website. We both earn decent salaries, I am on £32k and my partner is on £28k, and we are looking to borrow around £120k to £130k with a £15k deposit.

I have read some recent horror stories concerning HSBC, on these boards and others, intially providing an approval following a formal application but then declining at the underwriting stage.

I concerned that this may well happen to us and I would appreciate some thoughts/ advice on our current situation. Whilst I have no history of late payments or defaults/ CCJ's I do have a high level of unsecured credit in my sole name. about £20k on a personal loan and £5k on a credit card. The loans are due to be paid off within the next three years and the credit card will be paid down our of surplus income now that I no longer need to save for the deposit.

My partner on the other hand has no loans or credit cards and his regular financial commitments are things like car insurance, mobile phones and student loan repayments.

When doing planning our budget and factoring in the mortgage payment of c £800pm (assuming a £130k mortgage) we have joint surplus income of £1500 per month.

My question comes in two parts I suppose:

1) Will the level of unsecured debt in my name have a negative bearing regardless of how well I have managed to service it?

2) Is joint surplus income of £1500 after mortage and costs more that sufficient to meet HSBC or any other lenders affordability criteria?

Comments would be welcomed.

Thanks

Thrugelmir

jb79 wrote: »

I have read some recent horror stories concerning HSBC, on these boards and others, intially providing an approval following a formal application but then declining at the underwriting stage.

You are confusing a DIP (Decision in principle) with a full application.
Underwriting is part of the formal stage of the application process.

Servicing of unsecured debt is to a degree irrelevant. What's more important is that you have the debt. The clear indication of a high level of debt is that your handling of personal finances isn't good.

gb26

We spent over 2 hours with HSBC this week going through our mortgage application. They basically are looking at whether you can afford the mortgage, not just if you have a deposit of a set amount.

Our advisor basically went through everything with us, he worked out a budget for if we were accepted, so how much the mortgage would be, utilities, council tax, food and petrol, car insurance, mobile phone, clothes allowance. They make sure that you can still afford to live with the mortgage payments and if something was to happen you can continue to pay. So we had to take in details of sick pay and long term disability allowance from work.

Our mortgage payments will be £800 a month and we don't earn quite as much as you, we can afford it with some savings and spends so I personally don't see why we wouldn't be accepted, but obviously it's not my decision. We should hear next week so I'll let you know how we get on.

I would say, go in and ask a mortgage advisor at HSBC but until it goes through I don't think you'll know for sure.

kier333

I think you will find HSBC very good, i have so far. When applying for a Mortgage 2009 i was earing around 50k pa, it was a single application £130k with 10% deposit, and i had an old default showing on my account, however the underwriters just called me up and asked me to clear it with o2 from my HSBC and they would then give the Mortgage the green light, all very simple

gb26

Just wanted to update you, we found out on Thursday our mortgage application has been accepted survey next then fingers crossed we'll be moving in 6-8 weeks!