Unfair Poor credit rating because of HSBC

SonofHodge

Ok this is my story, my wife and I earn approx 60k a year, we have never missed a payment on any debt we have. Before this fiasco my credit rating was 945 and my wife's was 999.

We have a house with 50k equity in it the house is worth 100k estimated by the bank and decided to release some so we could use it as a deposit for another house whilst renting our house out. Mortgage advisor said many ppl do this to put themselves in a better position to buy a house and the rented house can be a self sustaining investment. So our mortgage is with HSBC we asked for 25k remortgage they went through our finances with a fine tooth comb and agreed to lend us the money. So comes the day when they release the money and as advised I phoned up to ask permission to rent out our house but now hsbc say as we have just taken out 25k we can't rent out our house for 6 months. My wife and I are desperate to move as we have another child on the way. So as our plans have been ruined we decided to give the money back, I phoned his hsbc back and said we don't need the money anymore and changed our minds as we don't want to paying interest on a loan we don't want, so they agreed with no charge. We then went to the mortgage advisor and decided to change our mortgage to a let to buy and release the money that way. It turned out that we were refused and that our credit score was not high enough. My wife and I looked at each other and said that's impossible. But 4 weeks down the line we check our credit rating and they have been significantly reduced. I am now in the poor category and my wife is in the fair category. We have not taken on anymore debt and we have plenty of disposable income how do we get this rectified?

[Deleted User]

Ignore the scores. No one knows or cares about them apart from you.

Get a good broker to place the Mortgage with the right lender.

DCFC79

Deleted_User wrote: »

Ignore the scores. No one knows or cares about them apart from you.

Get a good broker to place the Mortgage with the right lender.

This, HSBC didn't refuse you based on your credit score as they dont see them and HSBC hasn't ruined your score as again they dont see it.

What matters is what's on your credit file with the 3 credit agencies.

haras_nosirrah

I am wondering if HSBC has put a cifas warning on the account as the op has openly admitted they tried to get a residential mortgage when they were going to rent out the property - this is against the mortgage terms and conditions as you should have gone for a btl mortgage to start with as you were trying to get a btl mortgage on residential rates. This is essentially mortgage fraud as you would have signed to say that you will be living in the property yourselves.

antrobus

haras_nosirrah wrote: »

I am wondering if HSBC has put a cifas warning on the account as the op has openly admitted they tried to get a residential mortgage when they were going to rent out the property - this is against the mortgage terms and conditions as you should have gone for a btl mortgage to start with as you were trying to get a btl mortgage on residential rates

I don't know about a CIFAS warning. Is it that bad?

But certainly, I would have thought that HSBC have now worked out that the OP is less than 100% trustworthy and have decided that they don't really want to do any business with them.

meer53

The poor credit rating isn't because of HSBC, it's because of your mistake in not asking questions before you took out the loan. It doesn't mean you can't still do it, you just need to wait. Ignore your credit ratings, they don't mean anything,

SonofHodge

HSBC didnt refuse us they gave us the money. as HSBC dont do buy to let mortgages as i was told. we tried another lender to get a BTL mortgage and it was them that refused.

Pablosammy

SonofHodge wrote: »

HSBC didnt refuse us they gave us the money. as HSBC dont do buy to let mortgages as i was told. we tried another lender to get a BTL mortgage and it was them that refused.

If you have £25k equity, then that's effectively 25% deposit on a £100k BTL property. Lots of lenders need a much higher deposit on a BTL mortgage - think 40%. You may find some that will accept a 25% deposit, but go to a broker to be sure.

Alternatively, you could concentrate on paying off your own mortgage rather than using that £50k to leverage more debt on two separate properties. If the housing market dipped, or even stagnated, your family could be in trouble financially. I'd opt for security rather than speculation when the family home and kids are involved. What would you do if you couldn't rent your BTL out? Could you afford to pay two mortgages while bringing up kids?

MARTYM8`

SonofHodge wrote: »

HSBC didnt refuse us they gave us the money. as HSBC dont do buy to let mortgages as i was told. we tried another lender to get a BTL mortgage and it was them that refused.

Who told you HSBC don't do buy to let mortgages?

http://www.hsbc.co.uk/1/2/mortgages/buy-to-let-mortgages

I think as has been said there may have been a mix up - and HSBC may have thought you applied to extend your residential mortgage when intending to rent out the place.

So you might want to ask them - and do a full check with experian, equifax and callcredit (Noddle) to check if there are any CIFAS notices on your file.

Cos while lots of people do use residential mortgages for buy to let - it is technically fraud.