HSBC mortgage underwriter issue - please advise.

whitelightning

Hi,

I'm trying to get a mortgage with HSBC and had the underwriters rejecting the application today. Stressing me out now.

We have banked with them for over 20 years with all our salaries and outgoings clearly visible with their accounts. We are looking to borrow £199k against a £250k property (LTV 80%, 4x salary). A couple of months ago we had a mortgage in agreement of just under £238k. However the underwriters turned round and said £120k is the maximum they will offer. Even the mortgage manager/advisor was shock with this outcome.

Both my wife and myself have good credit records with no missed payments. We have approx 7k credit card debt (on 0%) which we are paying off. No other debts. Just normal regular bills, food etc as outgoings.

The advisor stated the debt wasn't the issue; his view is that we have 7 credit cards between us, which is high amount and is seen as a great risk (potentially we could go on a spending spree and miss mortgage payments).

I'm not sure if the underwriter said something to the advisor on the phone. It seemed like he wasn't interested anymore once he got off the phone. I had the feeling HSBC didn't want our business. If I had £130k deposit (which is what they want), I'd be looking to spend more than £250k on a house.

My concern now is if we go to another bank or broker my credit record is already affected. Is it worth going back to HSBC and ask them to review my application again? Could we even get a detailed output of why my application was refused, so that we know what went wrong? To be offered half of the MIA was just hard to believe.

Appreciate any advice. Thanks.

Thrugelmir

whitelightning wrote: »

Both my wife and myself have good credit records with no missed payments. We have approx 7k credit card debt (on 0%) which we are paying off. No other debts.

Why not pay the debt off now?

Have you previously had a higher debt balance outstanding?

Do you have any dependents? i.e. children.

whitelightning

We've got the money in high interest accounts, which we can use to pay off the cards. The key reason why we haven't done it is we've got 0% deals and earning interest in the background. I did offer to clear the debts before and after the underwriter assessment but told not going to make much difference and all was factored into the MIA value.

No previous higher debt balance and no previous loans for over 5 years. All our purchases including cars are all in cash.

Got 2 kids.

whitelightning

One thing I forgot to mention. My wife immigrated to the UK 4 years ago. Has a good credit record - her own mobile phone contract, 1 credit card with zero balance and no debt/loans.

Will her lack of credit history in the UK affected our application that greatly? If so would we be better off with a sole applicant being me?

holly_hobby

HSBC are notoriously picky, I would say that if you have a large amount of free rolling credit (ie credit and store cards/flexi loans), this will have an impact on your credit score (due to the reasons already explained to you by HSBC).

You have offered to repay the os 7k cc debt, and cancel unused cards (?), which they have noted but still refuse to re-assess the app - as is their perogative unfortunately.

You may want to consider approaching a non-credit scoring lender such as Ipswich BSociety (whom lend nationally to direct applicants, but have geographical restrictions for intermediary business) whom have 4.25 x sole or & 1, at this LTV or approach a broker to save time and further unproductive credit searches.

Hope this helps

Holly

Thrugelmir

whitelightning wrote: »

Got 2 kids.

4 times salary with 2 kids is most likely the reason for the decline.

Paying childcare costs?

whitelightning

Thrugelmir wrote: »

Paying childcare costs?

£120 a month for childcare.

Thrugelmir

whitelightning wrote: »

£120 a month for childcare.

Underwriter will factor more than that in.

Do you feed, clothe them etc?

whitelightning

Thrugelmir wrote: »

Underwriter will factor more than that in.

Do you feed, clothe them etc?

Food, clothing , bills , regular outgoing etc have all been added into the report produced by the mortgage manager.

whitelightning

Thanks for your advice Holly. I'll have a look at Ipswich BS. Already been in touch with a broker, so hopefully some good news soon.

whitelightning

This could be a silly question. What is the maximum number of mortgage applications I should go through before I stop? I've only done the one with HSBC so far. Don't want to do too many to the point it's causing harm and damaging my credit report. Thanks.