HSBC @ 90% LTV - Am I sniffing glue?

s_D_john3

Hi all,
Currently in the process of finding a bigger property to live in. We want to find a way to preserve our current excellent tracker rate with HSBC (BoE + 0.79%).
The documentation says it is fully portable. I am reluctant to even try though given how picky I've heard HSBC are.
Situation:
We would be keeping our flat and getting a BTL with someone else (75% LTV, Rent would cover 130% of interest even at 6%). Not sure if the lenders delve into maintenance charges, but if they did then we might struggle on the interest cover ratio (probably one for another thread though!)
My partner has been self-employed for a year as a dentist. She worked as an employed dentist for three years prior to that on £45k.
Her contract will net her at least £45k p.a. now and she's also got a part-time employed job paying £6k gross p.a.
First accounts have been drawn up for 9 months to April 2012.

I'm on £42k employed. We're looking to borrow £252k whilst putting down a £28k deposit for total purchase price of £280k.

Given HSBC would be helping us out with the port (can't imagine they love you preserving a great rate like that), and the added complications around my partner's employment status, do you think it would even be worth applying with HSBC, or am I better to avoid the credit check on my report? Would love to think I could speak to someone sensibly at the bank about this, but suspect I would be up against a "computer says no" decision.

All thoughts and experiences of dealing with the bank are welcome. I understand HSBC only deal direct, but if any brokers have a view, I'm keen to hear it.

s_D_john3

Didn't explicitly say, but we would obviously be looking to take out a further tranche with HSBC to cover the difference between our existing £94k mortgage and the ultimate funding required of £252k.

Dave_Ham

To be honest, I think it unlikely.

That said, call them up and specifically ask them not to undertake a credit search and ask if you fit their criteria.

Remember, they are targetted on applications and not necessarily completions and therefore will be keen "to give it a go" although you need to be resolute.

You have many factors against you, but given the potentially portable rate you need to make the call.

Good luck

gt94sss2

Don't know much about mortgages and no harm calling them but have you seen HSBC's criteria for a BTL?

I get the impression they are not keen on them..

Also, how much equity do you have in your current property?

Regards
Sunil

s_D_john3

Thanks Dave - I think you are right, I need to make the call and see how far I can test them without committing to a full app (I'm pretty relaxed about our actual credit scores if it got that far mind).

Thanks Sunil. Yes - I realise HSBC pretty much don't even have a BTL product for someone in my situation (i.e. I don't hold £50k worth of UK investments with them unsurprisingly!). I was only looking to use HSBC for the new property. I think my existing flat stacks up ok as a BTL (25% of equity held and decent rental prospects to cover the interest) so I would be looking to use another provider for the BTL mortgage.
Or is your point that even holding a BTL mortgage in addition to the residential one would be a detractor for HSBC?

Dave_Ham

I think his point was regarding their buy to let criteria, although your assumption is also valid to how they would treat your new "buy to let" property given you do not have a tenant in place and can demonstrate the rent received.

I genuinely do not know as well known that HSBC do not use brokers and therefore do not know criteria.

Call them for sure, there are definitely a few hurdles here but the rate reflects their approach to lending. If you can get then worth a few calls now...

Good luck

gt94sss2

s_D_john3 wrote: »

Or is your point that even holding a BTL mortgage in addition to the residential one would be a detractor for HSBC?

I actually read your post as you wanting to increase your current mortgage with HSBC to fund the new property.

If you want to keep your current mortgage as it is,you could also ask HSBC if they would be willing to let you rent our current property out temporarily. I believe many mortgage companies do but may charge a higher rate of interest.

Re: the 50K.. if you own shares worth this much, you can hold them with HSBC and it counts as 'savings; for them (i..e if you has a S&S ISA)

Regards
Sunil

s_D_john3

Thanks again both.

Yes, consent to let is another option I have thought about if I couldn't port. At least I would benefit from the low rate for another year and everything I've heard about HSBC currently is that they will let almost anyone do it for a year, probably at no extra charge.

Sadly, I directly hold no shares. I'm pretty much raiding the piggy bank to be able to afford the deposit and associated fees on the new property.