Halifax application advice please after HSBC rejection.

jb8285

They booked an appointment for 10am this morning but did not call and when I tried ringing them it says they're not even there today.

Lauralou79

This may be a blessing. Like others have advised don't make another application yet. Several will hurt your credit file. Go to a broker who can best place your situation with the right lender.

jb8285

I will probably just leave it altogether until the house is sold and the existing finance cleared.

sparkey1

A lot of lenders will multiply your debts by a ratio, and remove that from your borrowing. That ratio is usually between 3 and 3.5. So assuming Halifax use 3x, 47K of debts will reduce your borrowing ability by 141K.

These are rough figures, but you earn 58K and I suspect Halifax will allow you to borrow 4.75x your income. So in theory they will lend you 276K. Less the 141K. You may struggle to get it past underwriting.

Pay down the debts first, wait 6 weeks for it to reflected on your credit record before you make any more applications.

I would recommend that your next approach be to contact a broker, not a mainstream lender. Keep us updated!

jb8285

Thanks that's good advice. The guy I spoke with at Halifax seemed to think it might be worth putting the application in as is and letting the underwriters consider it. It would be an absolute nightmare moving everything out just to apply a few weeks later and I don't know if that would work as I won't be on the electoral roll at any new address.

I have managed my credit perfectly comfortably and took it out to make some large purchases as I didn't intend to move for around 10 years but a sudden and very unexpected change of circumstances has meant we are moving much sooner.

jb8285

Sparkey1 are you a broker? I think I may have been misinformed on DTI ratio. I was under the impression that lenders used your gross monthly wage and subtracted monthly credit commitments from that figure?

sparkey1

No, not a broker but have have several properties and I do hold the CeMap qualification though. The way to work out how you are penalised for debt is to try the respective calculators and work out the ratio by testing the affordability bit with no debt and your debt. The other thing to do is to check if they have an intermediary site which will give you useful information. The intermediary site for Halifax is at https://www.halifax-intermediaries.co.uk/criteria/mortgage/default.aspx

jb8285

Thanks. I had already looked on the intermediary site. It was something like £267k without debts £245k with £670 per month. Will probably arrange a chat with a broker before proceeding.

jb8285

So based on the soft search Halifax have come back and said they would be able to go ahead but I would need a 35% deposit. This applies whether I clear my entire borrowing or just the 47K so I am assuming that it's based on credit score in part?
The advisor said that I should clear the 47k wait for the credit file to update and then reapply.

kingstreet

Yes.

A 65% "corrective action to proceed" is the next step up from a decline.

It means you are considered mortgageable with a 35% deposit, or more.