HSBC's Decision in Principle?

darkvader

In prep for our home purchase next summer, OH and I visited HSBC this weekend and went through the whole first buyer process, confirmed how much we can borrow and also got a decision in principle, valid for 3 months. The manager advised us beforehand a 'soft' credit search will be done for this.

I asked how valid the DIP really is and he said the number of rejections to people who got a DIP has been really low. Is this really the case? We have a clean credit history given we have lived in the UK for only 6 years and not done anything in this time to affect our credit ratings

For 80% LTV, HSBC is offering us the 3.29% Tracker Mortgage which I must say is better than others I have seen on comparison websites. Can I be confident that
1. Given HSBC are very picky in choosing their mortgage customers, can we be silently confident to get through most other mortgage companies lending criteria?
2. Since we secured a DIP from HSBC, does it suggests the likelihood of getting their final mortgage is quite high? This is assuming nothing changes with our profile and eligibility (we know there can so many 'other' factors to not securing the mortgage)
3. Is there anything we need to keep our eyes open for with HSBC? I know 2 people who have their mortgages with HSBC with no major complaints and havent seen anything scary on these boards, yet!

We will be contacting London & Country in a few months to see if there are better deals for our profile.

Thanks
DV

R_P_W

why did you get a decision in principle now if you are not looking to buy until next year and it is only valid for 3 months?

originalmiscellany

Good spot!
I am sure that the mortgage scene will change hugely in a year. what was your thought process behind applying for this?

darkvader

R_P_W wrote: »

why did you get a decision in principle now if you are not looking to buy until next year and it is only valid for 3 months?

We did not plan for it but, given their rates were quite good, decided to see if we could get over that hurdle. As I said, HSBC are known to have stringent requirements so you can say it was more for our peace of mind to see if we met their lending criteria or not even if only in principle.
End of the day, without being certain we are eligible for a competitive mortgage we cant even go ahead and look for properties! We have been in the UK for just 6 years so dont have too many other criterion to help us

And if this credit search does affect us in anyway, we now know we can always go back to HSBC and get a mortgage from them

DV

R_P_W

sorry but you do not know that you can get a mortgage from HSBC.

Getting an AIP doesnt mean you will be offered a mortgage. Even if it did, it will expire long before you are looking at buying. Lending criteria can change overnight. Rates can too.

If you have no bad credit history, a decent deposit and a decent income compared to what you want to borrow then you should be able to get a fairly decent mortgage when you need it - although dont get too set on HSBC and I wouldnt both with any more AIP.

A friend of mine phoned First Direct and they talked him into applying for AIP saying that it woudnt show on his credit score, but it did.