Do banks make mistakes on offers

dbg1986

Hi everyone

me and my partner have been struggling to get an offer post Covid but are getting over the line. We’ve had to get letters from work confirming what we earned and when we are returning to work from furlough. Then under writers passed all this and handed back to hsbc for the offer. However the offer now is £11k short of what the dip and illustration said. The new illustration shows a ltv of 95% but the original was a 85% ltv.
has hsbc made an error with a dar lower ltv compared to what we wanted of 85%.
its strange as the dip was based on lower ltv of 90% to be safe.
also strange underwriters passed all checks and even affordability is fine.

dbg1986

So the first illustration was for £191,250 With a ltv of 85% and now the illustration is for £180,000 with a 95%ltv.

Surly if they didn’t want to give us £191,250 it would of been declined instead of a lower offer being offered?

ACG

Your post does not make complete sense but ultimately either HSBC has made a mistake or the broker has.

You need to speak to the broker if you have one or HSBC if not.

I have only ever seen 3 mistakes in 10 years on an offer - one of them was my fault, the other 2 were the lenders, all were easily rectified. 

dbg1986

ACG said:

Your post does not make complete sense but ultimately either HSBC has made a mistake or the broker has.

You need to speak to the broker if you have one or HSBC if not.

I have only ever seen 3 mistakes in 10 years on an offer - one of them was my fault, the other 2 were the lenders, all were easily rectified. 

Sorry for my way of explaining it. We are paying a 15% deposit and on the illustration we had originally it stated this meaning our mortgage was for £191,250.
after having all the checks done a signed off from the underwriter we had a new illustration Which seem to show a 5% deposit And a mortgage for £180,000 this means we have to find another £11k which we can not. 

Hopefully something had been inputed wrong somewhere.

Thrugelmir

HSBC aren't currently offering 95% LTV mortgages. 

Are HSBC saying that the maximum they will offer you is £180,000 ? 

Have you made a full mortgage application? 

dbg1986

Yes we have made a full application. I’m just not sure why the original illustration had a mortgage of £191,250 but now it’s for £180,000.
i thought if they couldn’t offer us what we wanted the application would get declined and not sent out as an offer, especially after getting signed off by the underwriters.

KAP0365

The amount offered being lower doesn’t mean your LTV has changed. I assume they’ve said that with your 15% deposit the maximum they will lend you on top is 180000. Either the property you’re buying has been undervalued or your affordability isn’t good enough for the 191250. Ask your broker.

cooltt

dbg1986 said:

Yes we have made a full application. I’m just not sure why the original illustration had a mortgage of £191,250 but now it’s for £180,000.
i thought if they couldn’t offer us what we wanted the application would get declined and not sent out as an offer, especially after getting signed off by the underwriters.

I think you may be missing the point here.
An illustration is just that, this is what we could lend you based on what you've told us so far. After a full application and affordability checks this is what we can now lend you.

HSBC have to decide if you can afford the mortgage you've asked for taking into account affordability, they've obviously decided you can't so have offered a lower amount after a full assessment. 

[Deleted User]

Its very odd for an offer to be issued for a wrong amount.   Usually if the affordability assesment failed and it couldnt meet the amount requested then they would send a note to the broker saying 'max loan is £xyz, please advise how you wish to proceed'. They will then want to know how the shortfall is being made up (extra proof of deposit perhaps). 

I cant see a situation where a lender just offers a lower amount without checking with a broker or an applicant. 

If you are using a broker then communication must have gone to them asking how to proceed, not least becuase it looks like a new product has been selected at a different ltv bracket.  The underwriter just cant choose this for you as it would constitute advice. 

More to this than meets the eye I feel.   If a broker is involved i suspect they messed up the application by forgetting to declare something (student loans were always my downfall when i first started) and they are saying the lender made an error on the offer.