HSBC Mortgage rejected. Any idea why?

Gaz_W

Hi All,

I've seen several similar threads to this, but thought it best to start my own rather than hijack another.

Our mortgage has been rejected by HSBC. My wife and I earn £71000 between us, with one dependent. HSBC gave us an agreement in principal for £347000. We have a deposit £121,000 and have had an offer of £371000 accepted on a house. We only require £250000 (67% LTV).

After going through the application process HSBC came back to us and told us the most that we could borrow was £206000. Which has us a bit baffled.

My wifes credit cards are all clear and she has an excellent credit score.

I have £1400 on my credit card and about £10000 left to pay on my student loan, but that comes out of my salary at the minimum amount each month. My credit score was also excellent. It was 963 out of 999 on Experian.

HSBC are not really giving us any explanation as to why we are having these issues or indeed why they initially suggested we could borrow £347000 and then cut it by 59%.

We are now going to provide them with my wife's bonus details tomorrow in the hope that it will push it up a bit, but we are not sure its going to help. She gets up to 18% bonus per annum and usually ends up with between £5-7k .

The guy at HSBC seems to be trying his best to get it for us, but the underwriters seem adamant we cannot afford it.

Anybody here got any idea as to why it might have been rejected on affordability?

Funny_old_game

If the underwriters, who assess it manually along with system driven max loan amounts, are nervous you have little chance of achieving your goal. You seem to be assessed under stress tested MMR rules.

GMS

HSBC are just about the fussiest lender there is.

Speak to a broker and find a home for this. Wasting time with HSBC is likely to be fruitless.

Gaz_W

GMS wrote: »

HSBC are just about the fussiest lender there is.

Speak to a broker and find a home for this. Wasting time with HSBC is likely to be fruitless.

I have got in touch with the broker that was recommended by the development we are buying from.

Told him the situation and he's happy to help us, should tomorrows shenanigans be fruitless.

Thrugelmir

Gaz_W wrote: »

Anybody here got any idea as to why it might have been rejected on affordability?

Lenders run their mortgage books top down not bottom up. So could be for any number of commercial reasons. None of which have any direct relation to your mortgage application.

The basis on which they will offer is still 3.5x joint earnings (with one dependent). So hardly harsh. Given mortgage lenders offer mortgages at around 3.2x earnings across the board currently.

horngkai

I believe despite having a cleared credit card, the credit limit are accounted for when considering your application. Maybe try to close some credit card account?

When I was applying through HSBC, the automated system wanted to lend me an amount which was way short from what I needed. Underwriter overturn it though. Although I did pay off some 0% credit card bills and close the account when it was sent to the underwriter. Whether that helps or not, I am not sure.

Gaz_W

Didn't get chance to post yesterday!

After giving them my wife's bonus details for the past 3 years. Roughly 5k each year! They suddenly approved the application.

plumfin

Well done, that is good news!

HumphreyDumpty

Great news!