HSBC - Gap between offer and decision in principal

Blind1979

Went to HSBC and got a decision in principal for £400k based on information supplied.

Went and found a property based on this. Now we have come to do the full application they are only offering mortgage of £337k. A £63k difference.

I'm employed and I don't suspect there are any issues there. My other half is self employed. We do have account and provided all the information required.

The mortgage repayment on £400k would be £2,400 per month. Based on our take home net pay we are bringing home ~£6,500 per month prior to outgoings, eg easily affordable.

Any ideas why the computer said no, and how do you go about appealing this?

Thanks in advance.

Thrugelmir

What's the purchase price of property?

What deposit you are putting down?

How long has your partner been self employed?

What product did you apply for?

Did the bank value the property lower than the offer price?

Do you have any loans, credit card debt etc?

Blind1979

Thrugelmir wrote: »

What's the purchase price of property?

What deposit you are putting down?

How long has your partner been self employed?

What product did you apply for?

Did the bank value the property lower than the offer price?

£500,000

£100,000

3 Years (2 certified accounts + Tax Return which was acceptable to them)

80% LTV lifetime tracker

The bank haven't even valued the property. This is just the amount they are willing to lend.

neverdespairgirl

Blind1979 wrote: »

I'm employed and I don't suspect there are any issues there. My other half is self employed. We do have account and provided all the information required.

The mortgage repayment on £400k would be £2,400 per month. Based on our take home net pay we are bringing home ~£6,500 per month prior to outgoings, eg easily affordable.

Any ideas why the computer said no, and how do you go about appealing this?

Thanks in advance.

HSBC and First Direct (they are linked organisations) tend to have the best rates and therefore can be very, very picky about how much they lend, and to whom.

OH and I are both self-employed, and applied 2 years ago to First Direct when we were buying our flat. They would only offer us twice our annual gross earnings, so we went elsewhere (to Lloyds, with whom we both bank).

gazter

Blind1979 wrote: »

£500,000

£100,000

3 Years (2 certified accounts + Tax Return which was acceptable to them)

80% LTV lifetime tracker

The bank haven't even valued the property. This is just the amount they are willing to lend.

HSBC can be quite tough on self employed, generally its all three years added together and then divide by three. But if there is a decline in the latest year it gets messy.

_Andy_

"Any ideas why the computer said no, and how do you go about appealing this?" - what did HSBC say when you asked them?

amnblog

If they had all your wage slips and three years accounts plus a full lists of all outgoings at dip stage this should not happen. I suspect they didn't!

Maximum lending and affordability calculations are a constant issue in the market. If they won't lend you what you need their 'market leading rates' are an irrelevance.

Anyone tight on affordability and particularly the self employed should use a broker.

Blind1979

All they said about appealing was they would speak to their manager. The response after that today was that they were standing by their decision.

By extending the mortgage period they did increase the potential mortgage to £373k, still short of what the decision in principal said.

We did provide numbers over the phone for income/expenditure. In hindsight going into a branch may have been a better idea.

Now gone with a brokers and found a comparable deal. Not quite as cheap but not significantly more expensive. Panic over!

amnblog

Blind1979 wrote: »

All they said about appealing was they would speak to their manager. The response after that today was that they were standing by their decision.

By extending the mortgage period they did increase the potential mortgage to £373k, still short of what the decision in principal said.

We did provide numbers over the phone for income/expenditure. In hindsight going into a branch may have been a better idea.

Now gone with a brokers and found a comparable deal. Not quite as cheap but not significantly more expensive. Panic over!

learning for everyone. Rate is of no use without the lending.