additional borrowings - rejected?

m00

Hi

Talked through with HSBC "underwriter" yesterday.

We currently have a 160k mortgage with HSBC on a tracker 1.39%+base.

I put in application for additional borrowings of 25k at 1.99%+base. basically to convert the loft/house works.

Was rejected but they are supposed to call me back today, apparently it is unaffordable?

House is valued at 320k+ Income is 31k and 22k but partner is a nurse so take home pay is equivalent to 25k. Basically take home after tax is about 3.3k per month.

I am in shock as I dont see how this is worked out? We in the time of the mortgage have had a baby and childcare costs £400 per month but that is all and obviously wife has reduced hours. We have a 0% CC with 3k balance but have funds to pay that off.

Silly thing is I have an agreed offset offer - just need to sign the forms from FD but that is the whole £185k @ 1.99+base. So I dont understand the refusal?

Any advice welcome?

betmunch

Theres not much to say here I'm afraid. HSBC will not lend you the money you want because they feel it is unaffordable, you said it yourself.

This is a common problem with HSBC.

It is interesting that First Direct would lend you the money you need though, are you sure thats an actual offer that you have or just had it agreed in principal?

kingstreet

I can't talk about HSBC/FD but I've come across many cases where the underwriting for additional borrowing was different to that for a new mortgage.

I can believe it's possible to get a whole new mortgage greater than an existing mortgage and additional borrowing added together.

If it comes down to it, move to FD if it looks a good deal and you are confident about affordability.

Thrugelmir

m00 wrote: »

Silly thing is I have an agreed offset offer - just need to sign the forms from FD but that is the whole £185k @ 1.99+base. So I dont understand the refusal?

HSBC owns FD. So if you switch mortgages then the bank makes more money.

By declining to lend you additional funds the bank is forcing you to remortgage.

Seems commercially logically.

m00

Thrugelmir wrote: »

HSBC owns FD. So if you switch mortgages then the bank makes more money.

By declining to lend you additional funds the bank is forcing you to remortgage.

Seems commercially logically.

Thanks thats my feeling too - I guess the rate increase may be offset byt the fact it is an offset. I try and run a balance of about 5k in savings cash.

It is defintiely a mortgage offer as I have to sign the legal papers etc with the Offer documents from FD.

Thanks for the input/advice.