HSBC - Is it really impossible to get a mortgage?

billchecker1

Had a call from HSBC yesterday and the underwriter has approved my application. Good news.

I am however now a little torn as in the week I had an AIP dine with halifax who give FTBs their stamp duty back as cash. I am right on the 250K mark so would stand to really gain from this. Even with paying more interest, over two years I would be in profit.

I really need to sit done and do all the calculations.

Any advice from anyone? It could also delay my exchange date by a week or so however is is it really a mohair concern as the seller hasn't found anywhere to move to yet.

Caladan

After all the hard work I put in!?

Now the application is approved (subject to valuation I presume) you can go ahead and do what you like really, if the Halifax deal does work out a lot better for you then by all means go for it.

I would say - Be very careful, read the small-print. Check for conditions and so on, check for exit fees (this isn't the same as an early repayment charge) and make sure any fees for the Mortgage itself don't off-set the money gained.

Whatever you do don't cancel your HSBC application, because it may not work out with Halifax and then you'll be up the creek without a paddle or whatever the phrase is.

Caladan

Have just read the Halifax offer from their website - You need to clarify if they will treat you as a first time buyer considering you have owned before (it may seem irrelevant because you aren't remortgaging but you may be surprised).

billchecker1

Hi Caladan. Yes I am pleased that I was accepted. I may stick with I in any case as I don't think I have the time to start again.

Halifax confirmed that I could be classed as a first time buyer due to my wife not ever having had a mortgage. The saving is nearly 2500. It is a two year fix so I am free to leave or change after that. All other conditions seem the same.

The really sticking point however is that they calculated my monthy payments over 37 years rather than 30 with HSBC. Despite the longer time it was more with halifax. I suppose this means t whilst I save £2.5k I pay less of the capital off in that two year period.

amnblog

billchecker1 wrote: »

I suppose this means t whilst I save £2.5k I pay less of the capital off in that two year period.

Not necessarily.

Billchecker, you are discovering the complexities of the market when you go direct to the lender. Is the Halifax deal better than the HSBC deal? Is there another lender who would be better still?

This is the disadvantage of chosing your own deal and not using a broker.

Back to your question - mention your concern to Halifax and they will have a solution for it. If not, they do not know their own products.

Caladan

billchecker1 wrote: »

Hi Caladan. Yes I am pleased that I was accepted. I may stick with I in any case as I don't think I have the time to start again.

Halifax confirmed that I could be classed as a first time buyer due to my wife not ever having had a mortgage. The saving is nearly 2500. It is a two year fix so I am free to leave or change after that. All other conditions seem the same.

The really sticking point however is that they calculated my monthy payments over 37 years rather than 30 with HSBC. Despite the longer time it was more with halifax. I suppose this means t whilst I save £2.5k I pay less of the capital off in that two year period.

My general feelings about brokers are mixed to say the least, but the ones who are/claim to be brokers on this forum seem to give pretty sound guidance. Having read many of amnblogs posts I'd say he/she is one of them.

As to the term (37 years instead of 30) can't you ask Halifax to re-quote you on 30 years? An extra 7 years is a hell of a lot of interest. But bear in mind you can refinance your Mortgage onto a shorter term once your outside any penalty period, so the Halifax loan may still be more attractive.

Take a look at this page: https://mortgages.hsbc.co.uk/repayment-calculator

You can put in the details of your loan and it will give you a (very rough) estimate of how much you'll repay over x amount of years. It's not ideal though as you can only put one rate in rather than "fixed for 2 years then this rate".

It sounds like the person you spoke to at Halifax was making some decisions for you (such as the term), maybe to make it more attractive by offering lower monthly payments, or maybe because they were concerned it wouldn't be affordable over 30 years. I'd suggest taking your Key Facts Illustration on the HSBC Mortgage to them and asking them to match the term/product type as closely as possible so you can get a clear idea of the differences and similarities.

£2.5k is a big saving, and if they match the term as well it's a definite saving (you haven't mentioned what fees are payable with Halifax though).

dumpallhere

Two reasons why I decided to apply at Halifax instead of HSBC (despite being a premier customer there):

1. Stamp Duty paid for FTBs buying a property between 125K-250K.
2. Larger overpayments alllowed (10% of outstanding balance) on fixed deals (I was looking at 60%-70% LTV deals only).

HSBC's DIP said they could lend 288K, Halifax's DIP said they could lend 442K.

dumpallhere

billchecker1 wrote: »

The really sticking point however is that they calculated my monthy payments over 37 years rather than 30 with HSBC. Despite the longer time it was more with halifax. I suppose this means t whilst I save £2.5k I pay less of the capital off in that two year period.

As already mentioned, not necessarily.

Try this for self-help.

amnblog

Caladan wrote: »

It sounds like the person you spoke to at Halifax was making some decisions for you (such as the term), maybe to make it more attractive by offering lower monthly payments, or maybe because they were concerned it wouldn't be affordable over 30 years. I'd suggest taking your Key Facts Illustration on the HSBC Mortgage to them and asking them to match the term/product type as closely as possible so you can get a clear idea of the differences and similarities.

Caladan - the most likely reason Halifax are talking about 37 year term is so that their affordability calculator works for this client.

If the calculation does not add up at 30 years you can extend the term applied for up to 40 years (depending on age).

Even if you do have a 37 year term you can overpay within limits every month to keep things on track for a shorter term.

horngkai

I am surprised to hear that Halifax treat you as a FTB because your wife is as I thought as long as one of the applicant is not FTB, this will not be considered as a FTB application. This is of interest to me as my wife does not own a property currently and very well could apply to me.