FTB - Mortgage Declined

monty1981_2

Hi everyone, I'm a first time poster & need some help.

My girlfriend & I have just had our mortgage application declined by HSBC. We are FTB purchasing a property for £150k with a 10% deposit & our joint income is £58.5k.

My girlfriend has a loan with HSBC with approx. £7.5k outstanding & with repayments of £266 per month.

We both have overdrafts which we regularly use & which, until today, I didn't think would be a problem. Other than that we have no credit between us.

Our application was declined as we have both exceeded our overdraft limit a few times over the last couple of months - only by £50 max. each time & the balance was restored from HSBC savings accounts within 24hrs.

We don't splash out or go mental on material things but have been too optimistic in terms of how much we would put into savings each month & then have been caught short (silly I know).

I've since read how fussy HSBC can be but my question is will other mortgage lenders take a similar view?

I'm thinking of applying to Post Office or YBS but will they request 3 months worth of bank statements & adopt the same approach?

Waiting a few months isn't ideal for us as we have had an offer accepted on a dream house & will miss out if we do.

Many thanks for any advice

Thrugelmir

monty1981 wrote: »

I've since read how fussy HSBC can be but my question is will other mortgage lenders take a similar view?

Maybe take a few hours out to review how you can manage your money better. As you need to demonstrate that you can manage your personal finances properly. Start by clearing your overdrafts from your savings and learning to budget without using the overdrafts. Save what you have left at the end of the month.

Meeper

Ok, so at the current time, the OP is looking to apply for a mortgage, which means he is trying to buy a house. Your advice, Thrugelmir, whilst sound in the long term, does nothing to help his current situation. Please check your soap box at the door.

Now, to the point in hand - HSBC decline the majority of their 90% LTV applications. My favourite lender at the moment for 90% is Santander. They don't have the best rate on the market at this level, but their underwriting is consistent and credit scoring fair.

monty1981_2

Meeper wrote: »

Ok, so at the current time, the OP is looking to apply for a mortgage, which means he is trying to buy a house. Your advice, Thrugelmir, whilst sound in the long term, does nothing to help his current situation. Please check your soap box at the door.

Now, to the point in hand - HSBC decline the majority of their 90% LTV applications. My favourite lender at the moment for 90% is Santander. They don't have the best rate on the market at this level, but their underwriting is consistent and credit scoring fair.

Thanks Meeper, exactly the sort of advice I'm after.

I'm just a bit cautious as to my next move as I don't want another rejection to fudge up our chances of getting a mortgage elsewhere.

In your experience do you think Santander would be more accomodating to my situation than the Post Office? (or accomodating in their own right if you don't deal with Post Office)

hcb42

Other lenders are not that fussy in my experience, we have done far worse, that said LTV is only about 40% or something.

Good luck with it. My experiences have generally been with Halifax and Barclays/woolwich, who were nowhere near as particular shall we say as first Direct were with regards to documentation etc.

Meeper

monty1981 wrote: »

Thanks Meeper, exactly the sort of advice I'm after.

I'm just a bit cautious as to my next move as I don't want another rejection to fudge up our chances of getting a mortgage elsewhere.

In your experience do you think Santander would be more accomodating to my situation than the Post Office? (or accomodating in their own right if you don't deal with Post Office)

I've never had cause to deal with PO, so I couldn't comment. Regardless, how each individual lender interprets a situation is entirely for them to decide.

As I say, I have simply found Santander the easiest to deal with in recent times for 90% in terms of their consistency and the fact that they don't move the goalposts down the line.

kingstreet

Post Office and HSBC both have form for kicking 90% applications. They have too many apps and not enough money, so cherry-picking prevails.

You'll be asked for three months bank statements by probably every lender you're going to approach for a 90% mortgage.

I'd say find yourselves a good independent/whole market broker who will discuss these issues with the lender before submitting an application.

Otherwise you're going to have to put this off for a few months until these overlimits drop off your statements or run up and down the high street having potentially unnecessary and damaging searches all over your credit files.

ACG

I think you may stand a better chance with Abbey, but i have seem them drag their feet and want to see the ins and outs of everything.

There arnt that many 90% mortgages out there. So i would think if you get declined by another then its time to look at your finances get everything in order and leave it for 6 months.
Another option could be to merge your loan with the mortgage - the downside to this is that you will have that £7k debt for longer and pay more in the long run. BUT it might get you through HSBCs checks. Ask the underwriters at HSBC if they would accept you then - it could be an option.

Dont take any of this advice (im not sure if it reads as that), its just an alternative that might be available to you.

Thrugelmir

Meeper wrote: »

Ok, so at the current time, the OP is looking to apply for a mortgage, which means he is trying to buy a house. Your advice, Thrugelmir, whilst sound in the long term, does nothing to help his current situation. Please check your soap box at the door.

The OP has been declined. That's the fact of the matter. Merely trying to help the OP understand HSBC's approach in an uncomplex manner. As HSBC have always maintained a traditional attitude to lending even through the boom credit years. So has nothing to do with "soap box"views. Just a straight forward common sense approach to finance.

sheilds

As previously stated-go to a "whole of market broker" They will check out the best deal for your circumstances. Both my husbands and my respective banks declined our joint mortgage application-citing that we did not achieve their internal scoring systems.One said something about meeting their quota that month!!
We had banked with them both for years with no issues and were nearly in despair. We got sorted with Santander with a much better deal after going to a broker.I am really sorry we went near our banks in the first instance as I now can see they were "cherry picking"
BTW all Santander wanted was a copy of our payslips.

lellow_lorry

Going over your overdraft normally wouldnt flag up an issue as you resolved it quickly....however the markets are not as they were and lenders have tightened their belt. They look at how you manage your finances and going overdrawn is not a good start.......you state you had the money to resolve this quickly, but planning ahead of a mortgage application keep your account in the black no matter what, you had savings to make sure this didn't happen. Also keep a good credit trail...eg credit card. maybe use once a month for your shopping but pay off asap....keeps a rating going. Remember not all companies use the same criteria, maybe use a broker, and get another deal.