WARNING - HSBC ot refunding unsucessful mortgage application product fee

haras_n0sirrah

haras_n0sirrah said:

Ok then here is a test for fred - no one else answer.
Client comes in, young couple. Cant quite fit affordability but he is in a job with good career progression. They are 24 and 26. Parent willing to go on the mortgage but not on the deeds and with that they would fit affordability. Dad is 49. She is not a uk or eu national but has 2.5 years left on a spouse Visa and will then be changing to a permanent right to remain. Whoopsie they have a default for 150 but it was settled just over 2 years ago. 
They have a 15% deposit. House value of 300k
They would like a mortgage and you can get them one.
Now fred using your best buy tables 
A) which lender
which rate 
C) how long a mortgage can they have 
D) which initial term should they take 
E) what will their monthly payment be 
F) why are you advising all the above (remember if you get it wrong then in 20 years they can claim you missold them the mortgage and try and get multiple thousands off you)
Now I am going to start work so will be back to check your work later and compare notes. 

Fred didn't say so here are my answers. Of course Brokering is subjective so not everyone may agree
For this one I would try and talk them into buying a property they can afford but if not then the answer is
a) Barclays
b) 2.33%
c) 20 year 
d) 3 year fix 
e) 1330
f) barclays allow a joint mortgage, sole proprioter which means dad can go on the mortgage but not on the deeds so avoiding second stamp duty charges. 3 year fix is tying them in long enough to enable her to have permanent right to reside as most lenders are 25% deposit if you don't have unlimited leave to remain wheras barclays are 10% normally but currently 15% due to having no 10% products. 5 years would be too long as with his income progression they should be in a position to remortgage and release dad in 3 years. Barclays ignore defaults under £200 as long as they have been settled prior to application. 20 year term as that takes oldest applicant (dad) to age 70 which is the max allowed.

haras_n0sirrah

haras_n0sirrah said:

Scenario 2
Couple aged 43 and 46 would like a mortgage 
20% deposit
Mr is in 46k a year and has annual bonus of 12k a year 
Mrs is currently furlowed on 24,000 but normally earns 30k
They will be letting out a property which they currently live in. Mortgage of 500 a month, rental of 1000 a month 
They have debts of 300 a month car finance and 10000 on credit cards.
2 children
How much will the following lenders lend as their maximum (affordability calculators are all online)
Tsb 
Halifax 
Santander
Nationwide 

tsb - £2305. The don't accept furlowed income so mrs income cannot be used at all
halifax - £289,975
santander - 340,000
nationwide - 132,100 (they will count the mortgage payment against them unless they have already moved out of the property and let it with evidence on bank statements prior to application. They are also not accepting any bonus income)
as mr's income including bonus is over 50k cannot use child benefit

haras_n0sirrah

scenario 3 I placed them with Natwest International as they would accept it under a residential mortgage due to the clients intention to return to the uk and their relative residing in the property in the meantime which worked well as the client had a 20% deposit

So I guess this means brokers do have a place after all.

csgohan4

haras_n0sirrah said:

scenario 3 I placed them with Natwest International as they would accept it under a residential mortgage due to the clients intention to return to the uk and their relative residing in the property in the meantime which worked well as the client had a 20% deposit

So I guess this means brokers do have a place after all.

Sadly some people have an axe to grind when they couldn't get what they want or have the approval they needed. Don't get me wrong, plenty on here go direct, but sadly come back on here when it goes wrong or get nervous if they will get through e.t.c, whereas a broker will hand hold either for a small fee or even free. 

No regrets using a broker for my last 2 mortgages, one free and one fee paying no issues and no 2 hour telephone interview or lengthy form filing, market leading rates, job done imo. 

Kiwistrawb1990

I kind of look at it as, could I cut my hair myself? I mean I could, but do I know what I'm doing? Will I be able to do it myself properly not being able to see the back? Will I be satisfied with the outcome?

Buying a house is a massive commitment and one that if not done properly can wreck your finances, as OP is discovering. Always use a broker. They really do know what they're doing. 

bpj

On the original subject, we went direct with HSBC but applied in branch. We were promised by the advisor that the "non refundable" fee would be refunded if we didn't draw down for any reason, so I suspect this is HSBC policy despite the terms being to the contrary. I agree with a previous poster that determined but polite pestering is likely to eventually lead to the desired outcome. Good luck!

[Deleted User]

Im not getting into the use a broker / dont use a broker arguing as it doesnt help the OP. 

Its time for making a formal complaint. A polite but formal letter to HSBC complaints dept may do the trick setting out what happened. To keep the money is monstrous. The £999 should be to reserve the funds. The funds cannot be reserved if the damn application falls at the first hurdle. Different if a borrower deliberately pulled out, but they didnt. 

haras_n0sirrah

Possibly slightly childish on reflection but my argument was not whether someone should or should not use a broker- that is personal choice and many people with straightforward circumstances are perfectly able to diy it.
I got annoyed when someone said that all brokers (so therefore myself included) are money grabbing thieves who charge thousands (really?) just to fill in a form and anyone can do what we do with the aid of a best buy table. I just wanted to prove a point that what we do is more complex than looking at the cheapest deal on a computer. 
Anyway back to the op - they will get a refund if they are persistent.

KeepOnKnitting

Possibly childish but polite and still amusing to read.
Some people are good to go without a broker, but it sounds like with hindsight the OP's son could have used the extra support.
I have really valued the support of my mortgage broker, as with my adverse history I doubt I could have found a mortgage on my own, so I wouldn't be buying a house at all without that service.

csgohan4

back on topic, HSBC are among the most risk averse lenders out there, so you better fit their criteria before you apply, I wonder who would know what their criteria is?....