HSBC rejects remortgage application based on the fixed term contract

Vikv

Hi All,
We took a two year fix mortgage with HSBC two years ago with having two people on the mortgage and three on the ownership. Our curcumstances have changed and we need to remortgage and borrow more to buy third person out. This time the mortgage will include myself and the third person (my partner) who was just on the ownership but not on the mortgage initially.

We have heard back from hsbc underwriters today that our application has been refused due to my partner being on the fixed term contract.

The most frustrating things are that we are existing customers and have not been warned by the advisor that this might happen + on top of all rates have gone up today.

Has anyone had the same experience and have any advise? I feel like this would have been avoided if we knew from the start that likehood of approval is low and consider other options. Do we have any chance of them reversing their decision?

Many thanks

YHM

Was the contract structure disclosed to the adviser? Was it a HSBC adviser or a broker that helped? Unlikely they will change their decision, as this sounds like credit policy (which doesn't bend too freely with HSBC)

Plenty of other lenders would consider an application if your partner works on fixed term contracts.

Vikv

YHM,

Thank you for your message.

It was HSBC advisor and he was well aware of the contract being fixed term prior to submitting the application.

YHM

You may have grounds to complain, but they wouldn't bend policy for you unfortunately.

I'd speak to a good broker that can help you with finding a suitable lender

ACG

I think you are wasting your time making a complaint personally.

The advisors job is to help you at that point in time. They can not be held responsible for something that may happen in the future unless you made them aware of it at the time.

Why did you add the third person initially?

Vikv

ACG,

The property was bought to be equally owned between three of us and the reason for only two people going on the mortgage was that my partner was self employed and it was just easier for the two remaining people (including myself) to get the mortgage.

ACG

I am struggling to see how you think HSBC have any liability. If you kept things as they were for 25 years or however many years your Mortgage is over, they would have honoured it. It is you who is wanting to change something fundamental to your Mortgage and they are entitled to decline it if it does not fit their current criteria (not the criteria 2 years ago).

I would just concentrate on finding a lender who will accept you now.

Vikv

ACG,

I am not saying they have any liability. All am saying that the advisor did not make as aware of the fixed contract being an issue in the first place knowing that this is HSBC credit policy. We have waisted a month of our time as a result. Forgetting that we have another mortgage with them, this is still not what you would expect from someone who supposed to know the processes and policies inside out advising for HSBC only.

I am in contact with an independent advisor, but extremely frustrated about whole HSBC experience. In addition as we had to wait that long, the rates have gone up and we have to take a mortgage which is more expensive. Unfortunate for us.

Thanks for your responses. You obviously know more about the mortgage market than I do. Although, I deal with banks in the trading space where they are willing to adjust their credit policies for you if the want your business:)

ACG

Ah sorry I misunderstood/misread. I thought you meant the advisor from 2 years ago, not the recent advisor.

In that case, I completely agree with you. If nothing else you have wasted time and a credit check.

Sorry, I have a teething baby sat on my knee so only scanned through the initial post.

Vikv

No worries - too many facts I had to fit in a small post. Surprisingly, advisor has offered us to remove credit searches done by the underwriters. However, I am not sure how this works if the searches have been done and captured somewhere? I have a feeling that he has realised that he has messed this up as he has been acting in a strangely defensive and unprofessional way.

ACG

Get the searches removed if they are offering it. Chances are it will not be the end of the world if they remain on there, but if they can be taken off I would take their offer.