FTB -risk applying to HSBC?

Calamity_Jen

Hi, we've just put an offer in on our first new home :j
We had a decision in principle from a broker saying that we would be able to get a sufficient mortgage.

Now, the best rate I've seen by far is at HSBC, who have also given us an AIP. However, I've read on here that they are very very picky when it comes to actually agreeing a mortgage. My worry is that I don't know how long it would take for them to process it, and if we were rejected, how long it would take to apply with a different lender.

I thought about ringing HSBC, and the broker, for advice, but they've both got vested interests (HSBC gets money for processing, broker would get commission - but not from HSBC). I know it's not a huge amount to try to apply, but added onto the wasted time it's a bit irksome.

Anyway, the ins and outs are: Applying for a £112,000 mortgage for property worth £125,000, with deposit of £13,000. 2 year fixed rate special, with term of 30 years. The fee is £999, which we would pay upfront rather than adding to the mortgage.

My salary is £20,176, partner's is £19,206 + regular overtime (around £1,500). Both of us have student loans, which come straight from our pay packets, but no other debts. No other issues apart from a few late payments on my BT phoneline about 1-2 years ago, and some late payments on some catalogue clothes over 6 years ago. Both of us have banked with HSBC for at least 10 years, with a student account & overdraft, then graduate, then regular. Overdrafts not used at all. OH has a credit card which he pays in full every month. I did have one, but never used it so they closed it down. Between us we have just over £21,000 in savings, most of which is with HSBC apart from a separate ISA I have with £3,600 in.

So, what I'm asking is, on the basis of this, do we have a reasonable chance with HSBC, or should we just head straight for another provider? I know there's no definitive answer, but I'd just like to know what others would do.

One other thing that is worrying me a little - could mental health problems adversely affect the application? I've been on antidepressants for 9 yrs, and am currently on a waiting list for other treatment. It's not so bad that I can't hold down a full-time job, even if I do struggle a little, but at times it does impact on me and I have been to A&E once in the last year when I was at a bad stage (not suicide-related, just what they call 'in crisis'). will I have to disclose this?

Sorry for long post, thanks for reading and thanks in advance for any advice!

_Andy_

"One other thing that is worrying me a little - could mental health problems adversely affect the application?" - not at all with the mortgage.
Will affect life insurance etc

_Andy_

"HSBC gets money for processing" - not if the fee is added to the mortgage and it doesn't complete.

kloana

I applied for HSBC straight off the bat, thinking nothing at all of it (have banked with them and held most of my financial products with them since age 11). Then came on MSE and got the shock of my life, discovering for the first time how 'picky' they allegedly are!

Our situation: Joint income of £23k (this increased to £30k before our purchase even completed, as I went full time at work, but £23k between us is what we applied on). Very nearly 20% deposit (£15k on £76k house) - we intentionally kept it under 20% as we wanted a 7yr fix - this wasn't available on an 80% LTV deal.

25 year term, good affordability (despite low income), excellent credit (me), limited credit (partner - no adverse, just limited history). I had/have several credit cards (HSBC & non-HSBC), all of which I paid off in full each month, bar one which had a tiny balance (0%...M&S, i.e., HSBC!).

I had quite recently took out a new personal loan (guess who with? HSBC!) 3-4 months before applying for mortgage. It's now repaid, but the balance was several thousand at the time. It wasn't an issue - it just evidently knocked a few thousand off our maximum borrowing limit (which was far too big for our needs, anyway).

I had/have a £5,000 overdraft - infrequently used, though I do have several small dips per year. I was paranoid about the size of some of the credit limits (cards and overdraft) available to me, as they exceeded my annual salary (the limits just crept up over the years). I wrote a letter to the underwriting team at the same time as I posted my additional information (pay slips, etc.), explaining that I would be cutting down my limits, and had no intention to go mad on them, etc. - not sure HSBC even read it, as the mortgage became fully approved the same morning that they would have received my additional info.

Your missed/late payments on your catalogue won't affect your chances, if they really were 6+ years ago. Not sure about the BT payments - perhaps the only stick in the mud? - but have a chat with the mortgage team (telephone number on website). I had a small, unrelated query on one occasion, and they put me on the phone to an underwriter straight away. I made a few queries 'anonymously', too, and they were really helpful.

My partner (joint borrower) doesn't even bank with HSBC. He's joint named on 'my' account, but only has been for under a year. All of his money is transacted elsewhere.

Good luck!

R_P_W

Late payments when applying for a 90% product - think you are right to be concerned.

Thrugelmir

kloana wrote: »

Then came on MSE and got the shock of my life, discovering for the first time how 'picky' they allegedly are!

HSBC have always had a conservative attitude to lending. Even through the boom times. So when the competition fell by the wayside after the credit crunch, leaving HSBC as the largest lender left in the market. People were rather "shocked" to find how particular HSBC's underwriting was. In reality of course nothing had changed.

Of course being the largest lender now, they receive the most applications, and correspondingly decline the most.

kloana

Thrugelmir wrote: »

HSBC have always had a conservative attitude to lending. Even through the boom times.

I should have known this - they flatly refused me a student overdraft in 2003, for no particular reason. Not sure if things have since changed, but back then, the basic criteria for those accounts was a letter from UCAS, confirming your place at uni. I had no adverse credit history (like the majority of 18 year olds), and had managed my HSBC account very well. But, no. I went next door to Natwest instead, and they ripped my arm off.

Barring that one blip, though, I've always felt that HSBC have been incredibly generous in their lending policy and limits, in my case. There was one point where I earned very little for several years on the trot, but I had extensive lines of credit open to me there - Though I guess there's a lot to be said for treating your 'own' bank well, and managing said accounts properly, in good times and bad...

Thrugelmir

kloana wrote: »

Though I guess there's a lot to be said for treating your 'own' bank well, and managing said accounts properly, in good times and bad...

Building a history with a bank is invaluable. As over time their confidence in you as an individual will grow.

Calamity_Jen

I'm going to speak to the broker instead. Further research has also indicated that HSBC can be a bit slow, and I'm still not sure about how it works with a solicitor - I'd rather use a local one, then I can chase things up face-to-face if need be.

I must admit, I've not had a great deal of time to prepare / read up on mortgages - we weren't planning on buying for a few years, but this was too good an opportunity (well below standard prices, but in good condition, easy to move to).

Thanks for all the advice. Does make me wonder how people managed before the internet!!

hamster2013

its not hsbc that will be slow
they process applications within a week and you should have your answer

it is the solicitor process that will take the most time - expect anything between 4 to 6 weeks there.

kloana

Calamity_Jen wrote: »

I'm going to speak to the broker instead. Further research has also indicated that HSBC can be a bit slow, and I'm still not sure about how it works with a solicitor - I'd rather use a local one, then I can chase things up face-to-face if need be.

HSBC not slow per se, by any means at all (extremely quick in my case), but your solicitor must be CQS - Conveyancing Quality Scheme - accredited in order to deal with HSBC quickly. In theory, any solicitor can do your conveyancing here, but you'll pay an extra fee (in the region of £190 as a minimum), and could see your work slow down, if they're non-CQS.

This was the case between October-December 2012 (our FTB period) anyway - not sure if things have changed...prior to that, things were pretty tricky with HSBC/conveyancing for a brief period, as your choice of solicitor/conveyancer was closed to a very select few, for a period of several months - this caused known problems which, to be fair, HSBC realised and put right relatively quickly. If you're looking on the internet for info relating to HSBC and speed of conveyancing, only look at posts dated August 2012 and later.

CQS-accredited solicitors are easy enough to find. In my case, a national chain was used, albeit one with a local branch. That said, we never actually met our solicitor in person.