HSBC - Is it really impossible to get a mortgage?

billchecker1

So my wife and I are in the situation where we have had an offer accepted on a house.

I would be keen to know the thoughts of people with the following scenario.

I am not a first time buyer but wish to go with HSBC due to their outstanding rates on a 10% LTV.

I have read all the posts on here which seem to indicate that due to their low rates, HSBC can be as picky as they want with who they lend to. I understand this.

We sold our old house 6 months ago and have been living with parents ever since then.

The house offer is 243500 and I wish to pay a deposit of 27K. This means a loan of around 11% LTV.

Our joint income is around 48K and on checking HSBCs online affordability calculator we can get the above amount although we are close to the limit hence my trepidation.

Now on to our credit worthiness: Mine is fine. I have 16 years worth of good history, no missed payments and two settled car loans and settled mortgage of 8 years.

My wife on the other hand was not so good with her money management and before I took control of all the household finances, managed to miss four payments on store cards.

These are:
Shop direct: October 2010

Next: July 2009, February 2009, July 2008.

Needless to say these accounts are now all closed and settled. Since then she only has one mobile phone account and a M+S credit card which we took out to rebuild her history. This has no missed payments and has been held for just under 3 years.

Is this going to cause a major problem? I know no one can comment for certain but would appreciate any views. I have an appointment booked with them for next week but may cancel if it is obvious that an application would be declined.

I will have around 5K left after purchase costs but wish to keep these for decorating and improvements etc but can put this into the house if needed.

I have considered going for a 15% LTV but don't have enough yet.

Thanks all!

hcb42

they are picky, but then they must lend to someone or they wouldn't be in business

your wife's credit history is not horrendous, and thankfully the late payments are not that recent either

BTW it is 89% LTV you are going for, not 11% :P (if only!)

Clearly getting to 15% or higher will give you more options, but that is quite a bit more to save.

I wouldn't cancel the appointment at this stage, however.

kingstreet

See how you go on. If you get binned, a good independent or whole market broker should be able to find somewhere to place your case if HSBC don't want it.

At 90%, they can afford to take only the best cases and that's exactly what they do. Please do not buy any of their expensive, poor-quality insurance products in a fit of gratitude if you are successful. That's the reason for the loss-leading rates.

billchecker1

Thanks for the replies both.

I think in summary my problems are:

1) The four missed payments. Ranging from 2.5 years to 4 years ago.
2) The affordibity being around 10K to what I actually want to borrow.
3) Being at 90% LTV.
4) Reading the stories on here.

I have two questions:

I actually had an AIP from them around 18 months ago where they said they would lend us less than we were asking but hadn't found a house. Would that help our case? Or are these just sales tactics?

The only loan I have is a student loan which obviously affects my affordability, however this will be paid off in July 2014. I have a letter from the Student Loan Company confirming this as well. Would it be worth supplying this letter to them?

I could actually afford to pay it off but with interest running at only 1.5% I would be keen to keep this. Plus I want to keep some money to re-decorate the house and bar getting some new debt I wont find cheaper money anywhere else.

Thanks

Thrugelmir

billchecker1 wrote: »

I have read all the posts on here which seem to indicate that due to their low rates, HSBC can be as picky as they want with who they lend to. I understand this.

Not picky per se. HSBC have a target market for their mortgage products. So lower risk equates to lower interest rates. As the bank incurs fewer defaults and lower administration costs in managing it's overall mortgage book.

Do you bank with HSBC (or First Direct) ? As in the back of my mind I believe they have a minimum joint salary requirement for applications. That might be influenced if you bank with them.

billchecker1

Thrugelmir wrote: »

Not picky per se. HSBC have a target market for their mortgage products. So lower risk equates to lower interest rates. As the bank incurs fewer defaults and lower administration costs in managing it's overall mortgage book.

Do you bank with HSBC (or First Direct) ? As in the back of my mind I believe they have a minimum joint salary requirement for applications. That might be influenced if you bank with them.

And of course the million dollar question is my risk profile. Presumably that would be helped by the nature of ones work. Both my wife and I work in the public sector. I am a police officer and she is a teacher. A few years ago they would have been seen as rock solid jobs. Not so sure now, although the reality is that it is still fairly stable employment. I have been in ten years and the wife seven.

My wife has an old rarely used HSBC account but we bank with Lloyds. This wont help us unfortunately.

Whilst reviewing my own credit file this evening something has come up which may cause a problem, although I am aware that I may be "creating" problems for myself with worry.

I have a BA American Express card since 2010. I use this as my debit card. Paying it off every week and thus accumulating airmiles. From looking at my report every month their is a balance as I think they must simply take a snapshot on one dae each month. This is well below the limit but is still there.

I also have a Halifax Clarity Credit card which I use when abroad for holidays. This also has a balance shown on the months that I am away but also shows cash advances due to their exceptional loading costs.

Will these cause me a problem> Will this look like I am living in debt when actually I am not? Is it worth putting in a note to explain my use of these cards?

:mad:

Thrugelmir

billchecker1 wrote: »

And of course the million dollar question is my risk profile. Presumably that would be helped by the nature of ones work. Both my wife and I work in the public sector. I am a police officer and she is a teacher. A few years ago they would have been seen as rock solid jobs. Not so sure now, although the reality is that it is still fairly stable employment. I have been in ten years and the wife seven.

HSBC have always had a conservative lending policy (Asian roots). They've come to the fore as other lenders have fallen by the wayside since the credit crash of 2007. Leaving HSBC as one of the largest in the market.

No harm in applying.

amnblog

Don't waste your time.

Use a good broker if you have any blemishes on your credit record.

kingstreet

An AIP 18 months ago means nothing now, so ignore it. If they ask about the student loan, give them what you have.

billchecker1

I was under the impression that HSBC did not deal with brokers. Am I mistaken?

kingstreet

No. You aren't. Did I say something which suggested the opposite?