First time mortgage rejection query.

mjd87

Hi everyone, new to this game so apologies if I miss out some vital info.

Basically my girlfriend and I are trying to buy our first house but had our mortgage application (with HSBC) suprisingly rejected. Here are our details briefly:-

House - 120,000, 3 bed mid terrace.
Deposit - 15% (18,000)

Incomes - 23,000 (teacher) and 13,000 (hospital telephonist)
Debt - Zero, 1 credit card each with 0 balances.

Mortgage - 102,000, 2 year fixed, 4.1%, 30 years (payments would be ~ £450 p/m)

Current situation - Renting flat at £600p/m, typical household bills, no other major outgoings. We are both graduates 25 years, not married.

I was just wondering if, looking at the details above, anybody could suggest why we were rejected? I understand it is a bit of a dark art but we were both a bit miffed, particuarly as a friend got a mortgage with HSBC for ~95,000 on her own wage of 23,000.

The mortgage 'advisor' mentioned age and amount we were borrowing...I'm not sure what age they expect first time buyers to be and I didnt think we were overstretching ourselves with re-payments being ~£150 less than our current rent.

Any help would be greatly appreciated.

Thanks, Marc

Dave_Ham

I would imagine that this is purely down to lender selection; HSBC are incredibly strict.

I think it would be prudent for you both to check your Experian and Equifax files just in case something has cropped up on there, maybe from a shared house in your Uni days (just speculating) but do check and just pay the £2 stat fee.

Good luck

mjd87

Thanks for your quick response.

Yeah that is what we thought; with HSBC rates being the best they must be the most strict.

Pardon my ignorance but how would I go about checking our Experian and Equifax files (i will google also)? I cant think of any past mishaps but would like to cover all possibilities.

Thanks again

Dave_Ham

http://experian.co.uk/consumer/statutory-report.html

http://www.equifax.co.uk/Products/credit/statutory-report.html


Just pay the £2 for the Stat. version - this willtell you if anything on there..

Good luck

mjd87

Will do. They did say that we were not rejected because of our credit history but because of the banks own policies so I assume this would mean our files are ok?

They could not be any more specific which was a little frustrating!

Thanks again Dave

Dave_Ham

Is there anything unusual about where your deposit is coming from as criteria wise it is difficult to ascertain why as income mulitples are ok, credit commitments fine..

Strange, but we keep seeing this with them.

Check the files and then see where you are...

mjd87

The deposit was coming from two sources.

- £4000 of my savings a
- The rest from shares that my girlfriend inherited. Would it be worth getting the shares sold asap so they are just 'savings'?

I have applied for my experian files, didn't realise I would have to wait so long, always seems like an instant response to these things at bank.

We have arranged to see a mortgage broker through estate agents so hopefully they will be able to help get something sorted. Will the fact that we have been rejected once be much of an issue?

GMS

Rejection by HSBC shouldn't cause too many issues, just be honest with the broker.

Consider using a broker not connected to the estate agents though. They will know your hand and may let the agents know your position, plus they are often limited in lenders and experience.

Thrugelmir

I would say too low a joint income. HSBC prefer nearer £50k.

Simon11

I've just got a mortage with HSBC for 2.8% life time tracker and I'm 23. I'm purchasing alone on a £125k property with £60k deposit with a £28k salary.

I would say that your deposit is rather too low, I wonder if 20% would have got it? I'm surprised that at your ages you've only managed to save only a tiny abit and relying more on inheritance...

Thrugelmir

Simon11 wrote: »

I've just got a mortage with HSBC for 2.8% life time tracker and I'm 23. I'm purchasing alone on a £125k property with £60k deposit with a £28k salary.

Salary level is far higher for joint applicants with HSBC.