First time buyer, HSBC cancel application at underwriters?

Savyshopper1

Hello everyone,
I'm new tithe forum part of this site but looking for support and advice.

I am in the process of buying my first property. Brief outline of me:
I'm a full time permanent Teacher on £27715 pa.
I am a single applicant with 1 daughter.
I am looking to purchase a property valued at £126,500.
I have a 10% deposit and extra to cover legal expenses and buying of furniture.
I have no debts.
I have 1 credit card with HSBC which has no current balance and I've never defaulted on.
My only outgoings are mobile phone, gym membership and private dental care amounting to £70pm.
My childcare cost are £60pw.

I receiver a mortgage in principle with HSBC on the 6th December 2014. I proceeded to view houses and put an offer on eich was accepted. Returned to HSBC to continue mortgage and everything has gone smoothly. Surveyed came out 30th December 2014 and valued the property at exactly the price I've offered. My mortgage application went to the underwriters on 6th January 2015 and Ican see in the notes that it says "ready for offer". On the 8th January 2015 my application was sent to the manual underwriter where it has been cancelled!!!!!

It just doesn't seem right that I was told I'm my advice meeting that I could in fact borrow more than I needed and was able to shorten my term. My financial info hasn't changed at all in the 4weeks this has been going on. Only that I've bought a few items (tv,sofa,living furniture, cutlery, Hoover etc) in the January sales.

HSBC has taken the money for the 'booking fee' and surveyors! And cancelled it at the last minute with the reason "affordability" which I argued.

I'm extremely stressed out over this and don't want a refused mortgage in my credit report! The mortgage adviser is looking into it as she thinks it's odd too.

Hate HSBC at the moment

GMS

HSBC are the pickiest of lenders. Don't worry about a rejection on your credit file, it will show as a search only.

Broker may be useful for you on this.

Affordability may well be tight especially if you have pension deductions from your salary.

Savyshopper1

Thank you for the quick reply.

When I was asked my net salary I told them the figure after all my deductions. As I told my mortgage adviser I haven't given any faulse info. My net income and outgoings are still the same as 4weeks ago. The mortgage adviser thought it was very odd how they've payed surveyors as this is only done when HSBC are going to give an offer.

Savyshopper1

Also when it comes to affordability. After playing my mortgage and bills I will have £700 disposable income. Can somebody not live off that? Ps I live in the Welsh Valleys.

kingstreet

Savyshopper1 wrote: »

On the 8th January 2015 my application was sent to the manual underwriter where it has been cancelled

... and the reason you've been given for the cancellation is?

Savyshopper1

They've now said affordability. Which doesn't add up if I'm honest. As previously stated, after paying my mortgage and bills I will have £700 disposable income.

kingstreet

I've just run affordability on another lender's calculator known to be more generous than HSBC and based on the information you've given, the maximum mortgage is £96,050 over 25 years.

Was the cost of childcare properly entered in affordability at the outset?

kingstreet

The "go to" lender for this will lend £117k, so I'd speak to a broker ASAP.

Savyshopper1

Thank you for the replies.

I need to borrow £113,850 and HSBC initially told me in the mortgage in principle that I could lend £117,000. My net income is £1700pm with current £130pm outgoings (mobile, gym and dental, childcare). I estimate my bills on the property to be around £404pm and £548pm on mortgage.

It's redicilus that HSBC are saying I can't afford that on my wage.

kingstreet

It's your £250pm childcare cost which is hitting hard.

savit4l8er

Mortgage £548, bills on the property £404, gym+phone etc £70 and childcare £260 per month. £1282 That leaves £418 of your £1700 to cover housekeeping for you and a dependant, lifestyle (gym membership will be included in this), essential and non essential travel plus other costs under MMR assessment.

Do you see it as enough? HSBC do not.

Are you taking a fixed rate, the lender must confirm affordability for the first 5 years. If not a fixed rate they will be using a stressed rate in the background, it may be more than your £548.

As said above the childcare is eating into things a lot but on the figures I can understand the decline.

Have you made a formal complaint?


If you provided the costs of bills etc to an adviser, is it possible you could have gone a little over the top. In the background they use statistics in case people under estimate costs but can yours be trimmed.

Can you re consider your preferences, longer term?

Changes can make a difference.