HSBC Mortgage Decline

Drew83

Hello,

I have recently been declined for a mortgage with HSBC. I have banked with them for 10+ years. I went through the agreement in principle with no problems but the final application was declined on a basis of over reliance on debt.

I have a 2200 overdraft with them which i use the majority of the time and a 6k loan.

We are looking to remortgage our property which has a value of c.£200k and we need a mortgage of £140k.

On experian my credit score is rated as fair and my partners is good.

My partner has in excess of 10k savings which could be called upon if ever needed but we don't want to use this to pay off debts at the moment because it is a rainy day fund and we can comfortably afford interest and repayments on current debts.

We have a combined income of £66k. Ideally we want a fixed rate of c.4% for a 5 year period. is this a loss cause or can someone recommend a lender?

BoGoF

Having an o/d of that size and using it the majority of the time is not a good sign to your lender and that your outgoings exceed your income.

You need to clear it asap.

GMS

Continuous use of an overdraft will alarm lenders. Have you always been within pre-approved limits?

Plenty of mortgage around which fit your requirements. You need to find one who will be happy with your circumstances.

A broker may well be worthwhile for you.

Joto_2

I'd go through a broker a decent one should be able to advise if a remortgage is possible.
Unless it's urgent I'd probably concentrate on getting your score higher, a lot of lenders aren't going to be impressed with a fair rating and each time you apply for a mortgage it's going to impact on that score more

Meeper

I disagree that the overdraft will be a problem for most lenders, to be honest. Provided you stick within the agreed limits, this should not be an issue at all.

Agreed however with the previous comments that an adviser might be the best port of call.

HSBC's decline rate is astonishing, by the way.

chalkie99

I agree with the majority of replies, so far, that living in your overdraft is going against you. The lender is looking at your reliance on that and wondering how you are going to manage extra repayments.

On an income of 66k a year, living in your overdraft points to some adjustments being needed.

I suggest heading over to the Debt free Wannabe board and compiling an SOA (Statement of Affairs) so you can see clearly where your money is going and how you might turn things around.

Drew83

Thanks, I do tend to stick to my limits if something pushes it over it is corrected within a couple of days.

I did see after going through HSBC there decline rates are above 80% which is very frustrating as their mortgage advisor who had access to all my account info always said there would be no problems and then we were told we had been declined.

If they were open in the first place then we would not of gone through them and got a footprint on the record.

Thanks Again

betmunch

Joto wrote: »

I'd go through a broker a decent one should be able to advise if a remortgage is possible.
Unless it's urgent I'd probably concentrate on getting your score higher, a lot of lenders aren't going to be impressed with a fair rating and each time you apply for a mortgage it's going to impact on that score more

There isnt a single lender that will give a flying fig what score Equifax/Experian give you. If Equifax or Experian start lending then it will become relevant.

KingElvis

Yep your "score" is shizzle, ignore it.

Living within an overdraft and going over your approved limit (even if it is settled straight away) will mean, I would say, an instant decline with your bank...banks see constant use of an overdraft as poor budgeting and slack financial habits....they don't like it.

I would imagine you'll have more luck outside your own bank though.

CLAPTON

Drew83 wrote: »

Thanks, I do tend to stick to my limits if something pushes it over it is corrected within a couple of days.

I did see after going through HSBC there decline rates are above 80% which is very frustrating as their mortgage advisor who had access to all my account info always said there would be no problems and then we were told we had been declined.

If they were open in the first place then we would not of gone through them and got a footprint on the record.

Thanks Again

use your savings to clear the OD and the loan

without having to pay these and the associated interest you could quickly rebuild your savings and would improve your credit rating

unless the OD is interest free its total financial illiteracy to pay pay lots of interest on loans /OD and receive peanuts on savings.

Thrugelmir

Meeper wrote: »

I disagree that the overdraft will be a problem for most lenders, to be honest. Provided you stick within the agreed limits, this should not be an issue at all.

HSBC's decline rate is astonishing, by the way.

This is just good old fashioned no-nonsense banking. As it used to be. Before bank managers were discarded and replaced by salespeople.

The HSBC is merely saying sort your own finances out. Don't expect to reduce your outgoings by us allowing you to remortgage. As this doesn't resolve the fundamental issue of your personal financial management.