Experience with HSBC residential mortgage

TeddyandMarie

My wife and I have a residential mortgage with HSBC but are thinking of using our spare equity to buy a second property on a buy-to-let mortgage. This second property would solve a family problem in the long term so it's worth looking into.

Our residential house (HSBC) has increased in value considerably to give a LTV of 30%.

We are in 2 minds about how to approach it.

Does anyone have any experience with asking HSBC to release more funds on a mortgage?

What about converting the residential mortgage to a buy-to-let in order to buy this second house? Do HSBC happily convert a residential mortgage to BTL and what kind of fees are involved?

Any advice would be appreciated, especially anyone who has dealt with HSBC mortgages in the past.

Best,

Tedd

Typhoon2000

Is this second property to be let or to live in? If it is to be be let, then just go ahead and remortgage with HSBC ( the whole mortgage or just the extra if you are on some good deal you want to keep). You will be able to borrow as much as your affordability will allow.
After that you are free to do what you will the the equity you have borrowed.

kingstreet

If you intend to let your current home and buy a new residence, you are looking for a let to buy product for your current home and a residential mortgage on your new residence, if required.

If you want to raise the purchase price of a BTL property on your continuing main residence, it's additional borrowing on your current residential mortgage, or a remortgage to a new lender to replace your existing mortgage and borrow the additional funds you need.

If you want to raise the deposit for the purchase price of a BTL property on your continuing main residence, it's additional borrowing on your current residential mortgage, or a remortgage to a new lender to replace your existing mortgage and borrow the additional funds you need. You would then take a BTL mortgage on the property to be let.

Thrugelmir

HSBC may not like the purpose of the funds.

The BTL lender may not like the fact that the deposit is borrowed.

A couple of potential issues.

TeddyandMarie

Thanks for the replies everyone!

Has anyone actually approached HSBC with the proposal before?

Thrugelmir

HSBC only deal direct. HSBC do offer BTL mortgages so you can check online whether you meet their eligbility criteria. They do require sole income of £50k or joint income of £75 now as a base requirement for any of their mortgage products.

tigsly

that income level seems very high...

Thrugelmir

tigsly wrote: »

that income level seems very high...

HSBC have positioned themselves to target a very specific segment of the market. After the financial crash they found themselves left as the biggest gross lenders in the mortgage market. As everybody else cut back or left the market entirely. HSBC are really after affluent high borrowing applicants. Rather than providing finance in volume terms of mortgages.

busybe

I had a large amount of equity in my house.
I borrowed money from HSBC & used the money to buy another property which I now let out.

I think HSBC call it a "home owner loan" / "encumbered loan".

I applied for it over the phone by contacting the mortgages number.
I made them aware what the money was being used for - they were ok to lend for the purpose....(some banks weren't).

The whole process proved to be very stressful in the end due to delays in receiving documents, etc. They were developing an online system that would allow you to print off documents etc to speed up the process - but this wasn't operational at the time.

TeddyandMarie

Great reply Busybe, exactly what I wanted to know!

HSBC seem to have a history of good ideas that don't get executed on their part...

busybe

Do you intend to borrow all funds from HSBC to buy your 2nd propety outright?