HSBC mortgage underwriter issue - please advise.

holly_hobby

Well no more than 4 recorded searches in a relatively short space of time I would suggest - as it will certanily make any subsequent lender very nervous if 4 other providers have declined to accept the business.

In general, AIPs don't leave a footprint or record of search (as they only search public domain info, purely to reveal voters roll info, CJJs and Banktuptcy orders) - however they can still fail at full appiclation stage if something comes up under full underwriting checks (ie undisclosed adverse data such as defaults, late payments and being over exposed(or likely to be) re credit facilities inc rolling credit such as credit/store cards, or other inaccurate info upon which the app is based).

DIPs do leave a footprint as they are agreed after a full credit search has been done, and as such as long as other info such as that regarding salary and employment is accurate, the full application on submission is likely (all things being equal) to proceed through to survey and offer.

A non-credit scoring lender underwrites each case individually and don't use an automatic scoring system, so have more scope for mandate decisions esp for unusual cases.

Using a broker means that you can utilise their expierience of who is strict on rolling credit, affordability, or what ever the issue may be, and whom in their experience, is more likely to consider the case given the facts. They also have access to BDMs (business development managers), whom in essence are a middleman (albeit designed to procure mge business from brokers), and who a savvy broker will use in a sticky case, to assist in getting a case discussed and agreed for submission with the Underwriter, before any searches etc are done .... of course some cases aren't placeable no matter who or what you know ! (which I'm sure isn't the case here from what you say).

Hope this helps explain the process a bit more.

Holly x

whitelightning

Really appreciate your help Holly. Thanks!

whitelightning

A broker has briefly reviewed my situation and thinks other lenders will not be able to offer the amount I want. The key issue I was told is HSBC have rejected me and other banks can access the record and see the details, so the best will be slightly more than HSBC's £120k. I knew lenders could see the failed application but not the finer details as in the figures involved.

My immediate actions are to pay off the 0% credit cards or at least reduce the balance on them by a few £k and have a good look at our credit reports to see if there's any mistakes.

kingstreet

A lender will see only the credit search carried out by the lender. It will not see any information about a decline, or any other detail.

The application details you entered will be on the National Hunter database, so do not exaggerate your income and enter anything other than what was entered on the HSBC app, otherwise you'll trigger a fraud warning with new lenders.

Other lenders offer higher income multiples than HSBC. Have you tried any of the online affordability calculators to see what they would offer?

whitelightning

Thanks kingstreet. Sounds like either I was misled or I misunderstood.

Income was not exaggerated, all supported by wage slips and past P60s.

I have tried other online affordability calculators but I've lost confidence in what they say, after the bad experience with HSBC. I will do more searching and possibly approach another advisor for more advice.

kingstreet

I'm not saying it was exaggerated before, simply to ensure you declare the same figure next time you apply, as NH picks up inconsistencies in the data from application to application.

Some brokers and individuals use the fast-track (reduced income evidence requirements) system to apply for mortgages outside their income/affordability limits and use trial and error, from lender to lender, to facilitate this. NH picks up these applications and compares the data to ensure any potentially fraudulent activity comes to the next lender's attention.

As I said, other lenders have higher lending limits than HSBC, so you need to look at lenders' online affordability calculators to see what comes up.

holly_hobby

Ipswich BS don't accept intermediary business nwide, but do from direct applicants - which is poss why the broker didn't mention them.

As kings has advised, a record of HSBCs search will be on your CRA records, but not the reason for any decline/non pursuance of the application. He has also nicely explained the Hunter system - which I'm sure won't cause you an issue if your stick to the correct and supportable facts.

IBS multiple at 80% is 4.25 x sole/primary income & 1 of second applicant - and don't credit score, so they may be a fit - here's a link to their webpage if it helps ... http://www.ibs.co.uk/mortgages/mortgage-products (NB the above info is not a professional recommendation, but for general discussion only).

Hope this helps

Holly x

kingstreet

There are at least four High Street lenders with income multiples over 4.5x

£7k on a credit card should see £11,300 deducted from your borrowing power, assuming the lender uses 4.5x income.

I would be very surprised if this can't be done at High Street rates.

whitelightning

Holly, Kings - thanks for the very helpful advice.