Help - First time buyer

bezza3

hi

i'am hoping to recieve some advice on what to do after having our first mortgage application as a first time buyer declined.

we applied for a HSBC fixed rate mortgage for 2 years. the application has been declined due to not reaching a high enough credit score. although the MA from HSBC could not give exact detail as to why, i believe it is due to not having past credit, rather than having bad credit.

we both have a credit card to which we have used for the past year, paying off small balances each month. we have never missed a payment. neither of us have or have ever had a loan or any credit outstanding. the application has come back stating the affordability is perfect (which i presume this means the money we want to borrow compared to our income/outgoings??)

i have read on this site about situations of "human common sence" being able to over turn the decission, rather than "computer says no" how do i get to this level? or what might be the best advice moving forward?

thanks

CloudCuckooLand

HSBC are one of the pickier lenders. Try another. Or a broker.

Burridge60

You have chosen to approach probably the number one "cherry picking lender". Their rates are far too attractive to miss and they do seem to disappoint a much higher number since the credit crunch than they did before. But most lenders do too!

If you bank with them they can develop a great deal of credit info about you from your banking conduct and as such they would possibly have already been able to do the "common sense approach". One way round would be to get a larger deposit as this will lower the risk to the lender.

Other High Street lenders might not be so picky with their criteria and credit score but you don't want to go blasting into everyone's branches and have a credit score done.

I would obtain both of your credit files which will cost you just £2 each and can be done on line. Experian are the most used by lenders but there is also Equifax (and others less often used). When you have them the notes will help you to understand them. Then make an appointment with a mortgage broker and sit down with your files and see what he has to say in terms of lenders. You really don't want any further credit scores done until you are ready to make an offer and then it is a good idea to make your final choice of lender and be credit scored to make sure you don't have to withdraw the offer.

bezza3

Is being turned down by HSBC likely to make other lenders to decline even though they might of granted the application if we had gone there first?

what lenders out there seem to be granting alot? or have less harsh credit scoring? i appricieate every circumstance is different but it may give us an idea where to start looking

GMS

Your individual circumstances are not known therefore no adviser would recommend a lender to you.

As Burridge has said you may benefit from a visit to a broker.

The worst thing you can do is keep applying to lenders. Best thing to do is apply to the correct lender.

Your HSBC decline should not affect another lender purely for the reason of a decline, however the background to the decline may well cause other lenders to also shy away

herbiesjp

What purchase price were you looking at?
What deposit do you have?

What incomes do you have? Do you have any children?

bezza3

many thanks for everyones comments so far

property value is £95,000

LTV is 90% (£85,500)

first time buyer, no children, no loans, or outstanding credit, never defaulted on a payment.

current outgoings are 2x phone contracts approx £45pm

both use a credit card regularly for small amounts and pay off balances in full each time. salaries amount to £30K
ive been told by hsbs the affordability of the loan is fine?

ive been told the affordability of the loan is fine salaries combined are just under £30K?

herbiesjp

This would sail through with other 90% lenders.

Get in contact with a good whole of market broker and let them put some options to you.

They will not be as good as the HSBC deal most likely, but they will get you a mortgage offer.

bezza3

thanks for the advice, we are booked in first thing tomorrow morning with a broker.

our circumstances on paper seem good as you've said, hopefully we will have good news tomorrow. i will update when i know something.

one last thing, i presume although it looks like we dont have much credit history, going out and getting loans and cars on finanace etc isnt the answer to helping us get a mortgage?

bezza3

right

after speaking to HSBC the situation has changed.

turns out the credit history has nothing to do with why the application was declined, and was infact due to the affordability.

this was because they have entered our basic salaries wrong! neither of us have bonus/overtime. they have entered our salary short of what it actually is (around £3k a year short) although this doesnt sound alot, it made the application "tight" as she put it.

this iam not happy about as potentially it may have been agreed. we have argued the fact that this now shows up on our history of having a application declined through their error.

so where now?

my understadning is after speaking to the branch manager, we can appeal the decission with this new information and see if we can get the mortgage granted, or try and get the "foot print" removed and start a fresh with another lender?
:mad::mad::mad::mad::mad::mad:

GMS

HSBC can have the footprint removed very easily. All they need to do is contact the credit reference agency.

As for an appeal, why should you? They entered information incorrectly so they should be appealing to you to come back!!

Make a formal complaint highlighting the error of the staff and the impact on your applications elsewhere due to their incompetence.