HSBC Mortgage Declined - Self employed

roadrunner123

I have recently had a mortgage from HSBC declined because they say they cannot guarantee my long term income because I am self empployed.

My situation is that I am looking to release equity on my home to fund the building of a new property. I do not have any mortgage on my property or any other properties, I do not have any other debt.

My home has been valued by HSBC at 395k. I have 135k in cash savings with HSBC and a further 180k invested in a long term investment fund.

I am looking to borrow 240k.

I have provided trading accounts for the last 5 years with an average income of about 70k PA.

I can not understand why HSBC would not consider this to be a sustainable loan just because I am self employed and am also extremely frustrated how long it takes to get to this point with no indication of self employed being a problem.

Anyone had experience of this situation?

ACG

Is that really the reason they have given you?

Are you paying tax on the £70k - as in, is it your declared income?

Seems a bit strange, but take a look on these forums, HSBC have rules which are totally different to any other lender.

Dave_Ham

Search this forum for HSBC mortgages and you are not alone.

They are the most selective of lenders and even worse at the moment.

I am sure this is just a HSBC thing and you will be fine elsewhere with another lender. You will get close to their rates, but maybe not better...

All the best

roadrunner123

ACG wrote: »

Is that really the reason they have given you?

Are you paying tax on the £70k - as in, is it your declared income?

Seems a bit strange, but take a look on these forums, HSBC have rules which are totally different to any other lender.

Yes thats the reason they have given me, the girl dealing with it is appealing the decision of the underwriters, but I'm not holding my breath now!

I think Strange is an understatement, I hadn't even considered this being a problem. Yes the income is declared income.

ACG

I agree, strange is probably an understatement.

If they do decline it after the appeal im sure you will find another lender willing to offer you what your after.

roadrunner123

ACG wrote: »

I agree, strange is probably an understatement.

If they do decline it after the appeal im sure you will find another lender willing to offer you what your after.

I'm sure I will, its just frustrating that I was encouraged to go to the expense of a valuation when being self employed is clearly an issue with them.

Obviously their rate is very competitive at the moment and combined with no repayment penalty this particular package would have worked very well with the short-medium term investment the money is being used for.

I feel for anyone trying to get a mortgage these days no wonder the housing market is the way it is.

Thrugelmir

roadrunner123 wrote: »

I have provided trading accounts for the last 5 years with an average income of about 70k PA.

As a business or contractor?

Dave_Ham

roadrunner123 wrote: »

I'm sure I will, its just frustrating that I was encouraged to go to the expense of a valuation when being self employed is clearly an issue with them.

Obviously their rate is very competitive at the moment and combined with no repayment penalty this particular package would have worked very well with the short-medium term investment the money is being used for.

I feel for anyone trying to get a mortgage these days no wonder the housing market is the way it is.

I hate HSBC with their great rates and showing people what they could have won, although they represent the top table of picky lenders...

roadrunner123

Dave_Ham wrote: »

I hate HSBC with their great rates and showing people what they could have won, although they represent the top table of picky lenders...

I'll be leaving them with my savings at my earliest convenience.

roadrunner123

Dave_Ham wrote: »

I hate HSBC with their great rates and showing people what they could have won, although they represent the top table of picky lenders...

Thrugelmir wrote: »

As a business or contractor?

I have a construction company. It is a partnership with my brother.

Crashandburn

Plenty of other lenders will help in that situation as long as the income is consistent.

Might be worth looking at offset mortgages in light of the £135k cash you have. Also might be beneficial to order your SA302s from HMRC which is a statement of earnings which might help speed any new applications up

Good luck