Declined HSBC mortgage knocked confidence

MoneyMagic01273

After getting an agreement in principle my partner and I made a full application for a mortgage with HSBC which was subsequently decline based on their internal scoring.

The situation is this - We are first time buyers, property price we are looking at is £239k, we have a £24k deposit (so 90% LTV). Nothing unconventional about the property (although it is a flat, which I know is an issue for some lenders with 90% LTV but was told not for HSBC).

My partner and I have no dependants, both long term employed with a household income of £75k pa. We have no missed payments or arrears with any creditors. We have no unsecured loans on our files. Both on the electoral roll and only a couple of credit cards between us (with modest credit limits, rarely used and paid in full every month when they are used). The monthly repayments were easily affordable and I genuinely thought we were a pretty safe bet, to be honest.

We now need to look for another mortgage lender and I ended up speaking to the Post Office who also gave us a AIP. Are HSBC known to have a strict/high criteria? The experience has made me a little anxious to be honest.

Does anyone think we stand a better change with the Post Office or have any info (even annecdotal) to suggest they have a slightly more achievable scoring criteria? Any help or advice gratefully recieved!

GMS

HSBC are very picky and decine more than they approve at 90% LTV. Don't take it personally.

Speak to the Post Office initially and see if they like the scenario. If they do then go for an application.

Alternatively speak to a broker.

MoneyMagic01273

GMS wrote: »

HSBC are very picky and decine more than they approve at 90% LTV. Don't take it personally.

Speak to the Post Office initially and see if they like the scenario. If they do then go for an application.

Alternatively speak to a broker.

Thanks - interestingly I did initially consult a broker who was very honest and advised that for 90% LTV, the best deals (for people with straight-forward situations) were mainly available as deal-direct rates and so she felt she wouldn't be able to offer us the best available rates. Maybe we spoke to soon. I'm concerned that a further full mortgage application search on my credit file will see my credit score take a nose-dive and start getting into a rejection cycle - which is why I thought I would check here first.

Appreciate the advice

Thrugelmir

On your salaries it should be possible to save and increase your deposit within a sort space of time.

Your application may be have been declined for any number of reasons which are non personal related.

MoneyMagic01273

Thrugelmir wrote: »

On your salaries it should be possible to save and increase your deposit within a sort space of time.

Your application may be have been declined for any number of reasons which are non personal related.

You are right - we have the ability to save up around £1000 a month (probably more but we don't want to kill ourselves! ) , so perhaps in 12 months we could have saved up around £36,000 - enough to make it to 85% LTV on a £240,000 property. However, rightly or wrongly we wanted to start the process once we had a 10% deposit and we were under the impression this should be possible with our circumstances. My partner is 40 this year and really wants to do this house buying thing sooner rather than later.

And sods law is we've seen a property we really love - hence we would like to be able to do it now if we can. We realise the rate we get over the next 2 years would likely not be as good as it would if we waited another year till we had 15% deposit but we're OK with that.

Hey-ho I guess. Maybe we give it a go with the PO and if that fails, wait and save more money....

Thrugelmir

MoneyMagic01273 wrote: »

You are right - we have the ability to save up around £1000 a month,

With the right mindset I'm sure that you could better that figure.

MoneyMagic01273

Thrugelmir wrote: »

With the right mindset I'm sure that you could better that figure.

lol - I actually attempted a stealth edit of my post to that effect. We could do more I expect but we want to keep things balanced. Reaching our current £25k desposit has been tough enough over the last couple of years, what with odd "life" things cropping up. So llets say £1000 is conservative but realistic. And where we could save more, we would

GMS

Is the flat a new build?

If property is acceptable then there should be a lender for you. May not be the chapest rate available but the rates are irrelevant if the lenders wont lend!

MoneyMagic01273

GMS wrote: »

Is the flat a new build?

If property is acceptable then there should be a lender for you. May not be the chapest rate available but the rates are irrelevant if the lenders wont lend!

Hi, no its not a new build

kingstreet

PO have more form for turning down 90% apps than does HSBC.

Still, you do have an AIP, so fingers crossed.

MoneyMagic01273

kingstreet wrote: »

PO have more form for turning down 90% apps than does HSBC.

Still, you do have an AIP, so fingers crossed.

Really? Can I ask how you have formed this opinion regarding PO declines?

I got an AIP from HSBC too but it didn't mean anything.

Is it likely that a broker might be able to give me an opinion on lenders with typically less strict scoring criteria, do you think?