HSBC Agreement in principle but...

Delboy85

I have an agreement in principle with HSBC to buy a property for £283k (which we have had an offer accepted on). We passed the initial credit checks but reading more and more I am now getting nervous ahead of my mortgage meeting/formal application this Friday. My girlfriend and I are first time buyers. We have a deposit of 15%.

Me - £40k p.a. + average commission @ 50% over last 2 years of £23,500. So total of £63,500 (HSBC have confirmed this is how they calculate). Experian score of 990 and no missed payments in last 3 years zero debt on credit cards etc (I pay the balance monthly). I have 2 defaults for £196 and £98 for mobile contracts which have been satisfied. They are 3 and 5 years old respectively. I have worked out that I can cover the mortgage and reasonable monthly outgoings on my basic alone.

Girlfriend - £23.5k p.a. Experian score 922. No missed payments over the last 12 months. Zero debt and pays CC off in full monthly. She has a default from 5 years ago for £1300 which has not been satisfied.

I am worried because of these defaults particularly hers. Does anyone know the chance of us being accepted or should we try elsewhere? I dont trust the mortgage advisor we are going to see at HSBC to do the application because ultimately he is a salesman and wants us to at least try.

Thanks in advance

betmunch

The only person that can answer you 100% accurately is the underwriter at HSBC.

You are right not to trust the salesman at HSBC, he is likely to be targetted on applications so you will be a tick in hs box.

Personally I wouldnt bother sending you to HSBC with that credit file.

If you do proceed, please update us as it would be good to know if HSBC accept your adverse credit

The_J

Give it a shot, the more recent default is probably the greatest concern. 5 years is quite a long time ago.

Delboy85

BetMunch thanks for your response. Really cant afford to mess this up as a rejection will surely harm my chances further? Where would you send someone like me?

I was with an independent mortgage advisor but the deals they had access to were 0.75% higher than me going direct, hence me going direct to HSBC. I was also recommended by a premier account holder if that makes much difference.

I was attracted to HSBC by their tagline of "4 out of 5 First Time buyers are accepted". Although my credit history is chequered our affordability is good and the deposit is reasonable - based on this I would like to think we were not in the bottom 20% of applicants.

betmunch

I dont name lenders without doing a full fact find I am afraid. Possibly over cautious, but, well, sorry! Blame the FSA for making me this way!
I would say go back to your broker as hes the one who has done a full fact find. Are you sure he was Independent? If he was he should have offered you the option to pay a fee, and if you had done this he would have told you about the HSBC deal.
Having said that, maybe he didnt tell you about it as he doesnt rate your chances of being accepted!

HSBC have great rates, but that means nothing if you cant have them. With defaults like yours you should be looking for the lender most likely to accept you, not the best rate.

Delboy85

He didnt tell me because he knew he did not have access to the deal. I was being offered 4.79% through Leeds by them but I found Co-Op and HSBC at 4.09% by going direct. When I asked they said that doesn't come up on their mortgage list as it is a direct only deal.

Thrugelmir

Delboy85 wrote: »

She has a default from 5 years ago for £1300 which has not been satisfied.

Why not? Is this being repaid under a payment plan.

A lender may well question lending you £283k in these circumstances. As its the borrowers attitude to their personal finances that's equally important.

betmunch

Delboy85 wrote: »

He didnt tell me because he knew he did not have access to the deal. I was being offered 4.79% through Leeds by them but I found Co-Op and HSBC at 4.09% by going direct. When I asked they said that doesn't come up on their mortgage list as it is a direct only deal.

Comes up on my system. Its also going to be blatently on the HSBC website!

He cant have been acting on an Independent basis. I suspect he was Whole of Market, in which case he has no responsibility to tell you about HSBC.

Think we're getting a bit off topic though. Are you going to "give it a shot" with them?

Delboy85

Thrugelmir wrote: »

Why not? Is this being repaid under a payment plan.

A lender may well question lending you £283k in these circumstances. As its the borrowers attitude to their personal finances that's equally important.

Because it has been passed to another debt agency. I could pay this off in full now but wont that just start the 5 years again? I figured that the damage is done and might as well wait for stat barred as know one ever chases for it. She never paid the fine as had planned to challenge it as 95% of the charges are overdraft fines. Unfortunately she never did this and then the window of opportunity closed.

Delboy85

betmunch wrote: »

Comes up on my system. Its also going to be blatently on the HSBC website!

He cant have been acting on an Independent basis. I suspect he was Whole of Market, in which case he has no responsibility to tell you about HSBC.

Think we're getting a bit off topic though. Are you going to "give it a shot" with them?

I think so. If I get rejected do I have any hope of getting mortgage elsewhere for a reasonablish rate within the next couple of months?

Thrugelmir

Delboy85 wrote: »

Because it has been passed to another debt agency. I could pay this off in full now but wont that just start the 5 years again? I figured that the damage is done and might as well wait for stat barred as know one ever chases for it. She never paid the fine as had planned to challenge it as 95% of the charges are overdraft fines. Unfortunately she never did this and then the window of opportunity closed.

As I said comes down to attitude. The default will be picked up during the application process. Then will down to the underwriters decision.

For the sum you are borrowing. You would have saved £1,300 by going with HSBC rather than another lender. As often is the case with monetary affairs. The boomerang has a habit of coming back.