Refused HSBC mortgage and not quite sure why...

Rachsed

Hi all, I've recently been refused an hsbc mortgage and I'm really struggling to understand why.

It's a joint application, we both have perfect credit scores, recently paid off £15k of debts on loans and credit cards, are asking for less than they say we can have but they've refused on the grounds that we've exceeded our agreed overdraft limit in the last 12 months.

Whilst this is true, it has only been for a day at most and as soon as I realised I paid money in to bring us back under the limit.

Are they just being incredibly picky or is exceeding your overdraft a major no no at the moment?

I don't know who else to approach now for fear of being turned down again , I'm scared of submitting too many applications in case I wreck my credit file. Help!

shortchanged_2

Apparantly HSBC are one of the strictest lenders out there at the moment and are just cherry picking the lowest risk potential borrowers. The fact that you have gone over an agreed overdraft limit in the last 12 months highlights to them that your finances may not be totally under control.

kingstreet

Picky. I reckon you'll get a mortgage from most of the other 19 out of the top 20.

Rachsed

Thanks both.

Have just applied with Santander and been referred to underwriters, I hope this one isn't going to be refused also.

GMS

You have stated the reason why you were refused in your post.

HSBC are the pickiest of lenders and will refuse for the slightest reason. The fact that you have exceeded an overdraft indicates to them that you are relying on an overdraft and cannot control it.

Plenty of other lenders who would look to do it and HSBC are not always the best. Look at fees as well as rates.

Thrugelmir

Rachsed wrote: »

we both have perfect credit scores, recently paid off £15k of debts on loans and credit cards, are asking for less than they say we can have but they've refused on the grounds that we've exceeded our agreed overdraft limit in the last 12 months.

An underwriter will have a different view of you as credit risks. High levels of recent personal debt and overdraft usage will merely raise red flags. As its possible to profile people according to both their attitude and responsibility towards their personal finances. In that a reoccurance is more likely if there's been previous history. Something which only time can heal.