A couple of questions - HSBC and a situation change

thatcambridgebird

Hi all,

Apologies for what may well seem like very silly noob questions, but I just want to get this straight in my head as I’ve been given slightly conflicting advice from HSBC.

Firsrtly, our situation:

We are on the market to sell our house, probably for something in the region of £139-144k (let’s say it goes for in the middle, at £141, to make it easier!).

Our mortgage is with HSBC and is currently 1% above base. We have £118k outstanding on this mortgage, so if all goes well, we’d hopefully end up with £23k equity from our current property.

We have a separate, £100k desposit saved from a previous house sale. We are very very interested in a property we’ve seen which is on the market for £249,995.

Now, adding together all of the above sums, we’d have our £100k deposit, our £23k equity, and we’d like to port our current £118k mortgage to the new purchase. That gives us £241k. We’d like to top up the rest of the purchase price with some small additional borrowing of £10k, which I believe is the minimum we could borrow.

This is where it starts to get complicated. My current salary is £26276. I have outgoings (i.e. contracted commitments/utilities/insurances) of £450 per month. My other half was employed when we got our mortgage, but left his work 2 years ago to set up his own business (doing the same thing, but as a consultant). He made no profit or loss in the first year, and his accountant has projected £20k profit for this year. He has always continued to pay our mortgage – it has never come out of my account – and both of us have a good credit history. I have a £2k credit card balance, but we have no other loans or debt.

One HSBC person told us in branch that we could port our mortgage and just apply for a top up (as above). She wasn’t a mortgage person, but rather a personal banker. The mortgage guys on the HSBC phones have since said that this is correct, but that the porting needs to be treated like a new application, and that they’d only really be able to use my salary, with my partners info/payment history as supporting.

We are getting a bit confused and frustrated, as we don’t want to spend a fortune on something ridiculously over our budget, and believe with the balances we have that we could well afford a top up. However, Decisions in Principle need to be based on my income and so it now looks like we can’t afford our current property, let alone a new one!

Would any of you who are much more expert in the field be able to give a bit of insight on exactly what can/can’t be taken in to account? We would love to move, but as we’re moving from East Cambridgeshire to Central, we aren’t (in reality) going to find anything below £230k that’s liveable (we are after a house, not flat), and it’s proving to be increasingly confusing to get a straight answer from HSBC about what – if any – of my partner’s income can be accounted for, and what supporting info of his they’ll take into account if it has to be a single app.

Thanks all

koexelek

Until he can show at least one year's proveable, taxable income ( not a projection) most lenders will class him as unemployed, and a financial dependent on yourself :eek:

Most lenders needs two or three years trading figures before they will consider lending to a self employed person.

I can't see HSBC being that keen to help, because 1% above base is a terrible rate FOR THEM.... so I am sure they would not mind losing you as a mortgage customer on that rate.
They are your best hope though.... good luck

thatcambridgebird

I forgot to add, the likelihood is that we'll stick with HSBC rather than go anywhere else, and we've banked with them for over 15 years.

Their telephone mortgage woman seemed cautiously confident that we could actually get what we'd need, but advised seeing one of the in-branch underwriters (which we are doing next Friday).

I suppose my question, therefore, is: do any underwriters/advisors know exactly what will be taken into account given our current position and previous history? The phone lady kept talking about affordability, rather than salary multiples, whereas the in-branch personal banker talked about putting a supporting case together based on what my partner does, showing his old employment P60's and so on...

Dave_Ham

I fear you do not have a hope on the numbers provided...

Creative solution would be to lend maximum on your income alone and top the rest up, so at least they should let you protect the rate...

Good luck

thatcambridgebird

I have an update, as we've now accepted an offer.

Our house has been "sold" for £143k as we accepted an offer from a first time buyer today. We still have £100k deposit, and have £118k outstanding which we'd like to port. Does our firm offer now make any difference - we'd be looking to offer on a property valued at £249k, putting down £100k in deposit, now having equity of £25k, and looking to borrow the rest by porting the outstanding £118k and topping the rest up with additional lending.

Am speaking to HSBC mortgage guys over the phone tomorrow, to go through a decision in principle. My salary is £26276, as stated below, and they looking into the possibility of taking my other half's position into account.

Ho hum... the pain of waiting! :eek:

Simon_gloster

The income multiples are too much. Never would they allow the lending you require. You could port the rate only on the maximum loan size their system allows.

Branch have targets, underwriters decide cases. Self employed with little or no provable HM rev & customs is unlikely to whet an underwriters appetite. Loan stretche are possible by maybe £1-3k, but no more.

If your case came to me....it might.....i'd decline it...and I dont know if you have debt or kids!!!

Thrugelmir

You may well fall short of HSBC's income requirements.

thatcambridgebird

Just an update - and it's good news :j

We went into branch the Friday before last, having been messed about by various phone advisors for HSBC, one of whom said they could lend £123k (but suggested the branch meeting) on affordability, then another who said they'd only lend £113k as it was all done on salary multiples. :idea:

Anyway, after a looooooooong in-branch meeting at which time the mortgage advisor said she'd support what we need (£121k), she sent everything off for agreement by the underwriters. It's taken nearly two weeks, but today they came back having approved it :T

I think what swayed it for us in the end was sitting down in front of a human being, rather than going through a black-and-white process over the phone. The mortgage lady we met calculated that we're only asking for an extra £3k on top of what we're porting, which works out at an additional £17 per month on the current rates. They saw that, in spite of being self-employed, my other half has always been the one who pays the mortgage, and even pretty much said it'd be crazy of them not to approve it, as they want to keep our custom.

So, now begins the nightmare of moving home! We've had an offer accepted on the house we love, and we've got what we wanted on our home, so now we just have to hope everything else goes smoothly and there's no hold-ups along the way.

It goes to show, that although it might not work out for everyone, it helps to speak face-to-face to explain a situation

bigadaj

Well done, surprising outcome. Forgetting everything else hsbc are effectively losing money at the rate you are borrowing at, so you would expect them to get you off this if they could, seem fairer than anticipated.

thatcambridgebird

I know this is an old thread, but I was posting something elsewhere, and thought I'd give a very belated update for anyone else searching for info on the same situation.

Re the original message, our application was all approved by the head office underwriters at HSBC, and we've ended up paying an additional £17 per month for the extra £3k we borrowed on top of our ported mortgage.

Both our sale and purchase went smoothly, and we moved out/in on 24th September. We've got a lot of home improvements to do in the new place, but for anyone who is in the same tricky situation, my advice is don't give up, and like I originally said - definitely try to speak to someone face to face. So often the people on the end of the phone understand your situation but are limited by their policies and so on. We really found that going and taking the time to speak to a branch advisor gave her a feel for our situation in full - even though it took about 2.5 hours per meeting (there were two in the end) to go through everything