HSBC not understanding Shared Ownership

mop90656

I've just started the process with HSBC. Any update on this process?

They have their own way to calculate the LTV which is different from the rest of the banks. A bit scared that isn't going through...

JPB123

kingstreet wrote: »

You're not trusting a sourcing system to be accurate on newbuild LTVs anything are you?

Mortgage Brain certainly isn't.

I double-check Trigold to ensure that even my name is right

kingstreet

mop90656 wrote: »

I've just started the process with HSBC. Any update on this process?

They have their own way to calculate the LTV which is different from the rest of the banks. A bit scared that isn't going through...

What? They don't use the mortgage amount divided by the purchase price? :eek:

Pinballmachine

For shared ownership, HSBC uses the total value of the property for 'value', not the share that is being purchased. Therefore, buying a 60% share and putting down 10% of 60% (i.e. 6% of total value) as deposit would require a loan of 60% - 6% = 54%, against the total value of 100%. The LTV ratio is therefore 54/100 = 54%, which will get you the best rates on the market!

Brock_and_Roll

Pinballmachine wrote: »

For shared ownership, HSBC uses the total value of the property for 'value', not the share that is being purchased. Therefore, buying a 60% share and putting down 10% of 60% (i.e. 6% of total value) as deposit would require a loan of 60% - 6% = 54%, against the total value of 100%. The LTV ratio is therefore 54/100 = 54%, which will get you the best rates on the market!

If that's what HSBC are doing then there has either been a misunderstanding with the internal product approval process or they have taken leave of their senses!
The "real" LTV in terms of HSBC's loan as a % of the asset security they have is 90%.

minimike2

Well as far as I can see HSBC will only lend to 85% on new build.

minimike2

minimike2 wrote: »

Well as far as I can see HSBC will only lend to 85% on new build.

Not sure on the shared ownership side.

In the past other lenders have based the product LTV on the overall price, not just the share price, although most I can think of changed this to the purchase share. So it's not totally impossible, but unless someone who works for HSBC is willing to say then we will not know for sure.


Oops I didnt mean to quote myself there?!

siamesebengal

kingstreet wrote: »

You're not trusting a sourcing system to be accurate on newbuild LTVs are you?

Mortgage Brain certainly isn't.

Brock_and_Roll wrote: »

If that's what HSBC are doing then there has either been a misunderstanding with the internal product approval process or they have taken leave of their senses!
The "real" LTV in terms of HSBC's loan as a % of the asset security they have is 90%.

As far as security goes, the way they do it is the right way for them to do it. The way SO leases work, payments go bank -> HA -> SO owner/tenant. In the event of reposession, most SO leases provide for the bank to have recourse to the entire property if the share sale doesn't cover the mortgage. So for a 60% SO with a 90% mortgage, it is 54% LTV for them.

Lunchbox

Pinballmachine wrote: »

For shared ownership, HSBC uses the total value of the property for 'value', not the share that is being purchased. Therefore, buying a 60% share and putting down 10% of 60% (i.e. 6% of total value) as deposit would require a loan of 60% - 6% = 54%, against the total value of 100%. The LTV ratio is therefore 54/100 = 54%, which will get you the best rates on the market!

If this is correct, I'm jacking in my 95% LTV SO mortgage at 4.69%, early repayment and all! It can't be right - by this maths, HSBC would offer me a 45% LTV at 1.24%.