HSBC Declined Mortgage

MoodyAboutMortgages

Hello
We have sold and had an offer accepted, we had a decision in principle and have just submitted our full application with HSBC (porting a good fixed rate so don't want to move lender).
HSBC have straight declined the application and will not even put it in front of an underwriter. The reason they have stated is something on our credit report doesn't meet their criteria - we have checked our reports, both are 999 not even a late payment, they are spotless, our affordability isn't the issue either. They say they cannot tell us anymore, so we have had to raise a complaint.

My only thought on why this may be is that my income has been unstable the last 12m due to maternity leave, bonus months, and redundancy (I have a new job and have proved this). But they won't let me explain and evidence the reason for income fluctuation, if that's even the problem.

I really cannot see why they won't lend to us, I feel like it needs a human to look at it rather than a computer but they are so unhelpful thus far and won't allow it - hence the complaint.

My question is, if they can't help and we go via a broker, pay the exit fees and higher interest over the next 2 years which in total is £15k - and they cannot resolve our complaint or give a reason for decline - can we take this to the ombudsman and what are the chances of claiming any of this back?

We love the house, but it makes me sick to think we're throwing away £15k!

Thanks for any advice!

DE_612183

your credit score is meaningless - it's what HSBC don't like about the content of your credit file - have you got a copy so you can see what that might be?

You can't really go to an ombudsman - they can lend to who they like and don't have to say why they decline - it may be better to go through  broker - they may be able to get more info about the decline.

MoodyAboutMortgages

What do you mean by the content of the file? Everything there is paid up on time, no bad credit etc, on electoral role - we have spoken to Experian and they've been through it all and said there's nothing untoward.

Emmia

MoodyAboutMortgages said:

What do you mean by the content of the file? Everything there is paid up on time, no bad credit etc, on electoral role - we have spoken to Experian and they've been through it all and said there's nothing untoward.

Have you looked at all three file providers? Not just Experian.

DE_612183

MoodyAboutMortgages said:

What do you mean by the content of the file? Everything there is paid up on time, no bad credit etc, on electoral role - we have spoken to Experian and they've been through it all and said there's nothing untoward.

Some people just look at the score - not each agreement to see if there was missed payment 2 years ago.

If you've done that and there is nothing, either they have mixed you up with someone else ( check the associated agreements and linked addresses ) - or it could be something to do with the postcode - perhaps HSBC don't offer mortgages on that type of property or location.

RelievedSheff

I'm not sure what you want to complain about!

HSBC have said they won't lend you the money. They don't have too even if you have a perfect credit file. They are under no obligation to lend you money.

movilogo

can we take this to the ombudsman and what are the chances of claiming any of this back?

Almost no chance. I went to Ombudsman for a car loan related complaint. They were useless. They simply check if lender followed their process. 

If HSBC won't lend you just go to a different lender. 

MWT

MoodyAboutMortgages said:

HSBC have straight declined the application and will not even put it in front of an underwriter. The reason they have stated is something on our credit report doesn't meet their criteria - we have checked our reports, both are 999 not even a late payment, they are spotless, our affordability isn't the issue either. They say they cannot tell us anymore, so we have had to raise a complaint.

Use somewhere like checkmyfile.com to check all the important credit agencies, not just Experian. Do look through all the details and especially the associations and fraud alerts.

MoodyAboutMortgages said:

My only thought on why this may be is that my income has been unstable the last 12m due to maternity leave, bonus months, and redundancy (I have a new job and have proved this). But they won't let me explain and evidence the reason for income fluctuation, if that's even the problem.

Are you already working at the new job and is the new salary reflected in your HMRC records?

If there are differences between what you have told them about your current salary and what HMRC are showing that might cause issues.

MoodyAboutMortgages

movilogo said:

can we take this to the ombudsman and what are the chances of claiming any of this back?

Almost no chance. I went to Ombudsman for a car loan related complaint. They were useless. They simply check if lender followed their process. 

If HSBC won't lend you just go to a different lender. 

That's what I expected to be honest, whilst we appreciate HSBC has the right to lend to who they wish, as we have an existing fixed rate mortgage in place to send a further borrowing application for a house move straight to decline with no explanation given is poor conduct. They have us over a barrel because we now either, can't move or have to pay an early redemption charge and higher interest with a new lender – the total of these costs is C.£15000.00 and either way HSBC get paid so I guess they don't care. If they could give a legit reason I would swallow my pride and accept it, but they haven't.

MoodyAboutMortgages

MWT said:

MoodyAboutMortgages said:

HSBC have straight declined the application and will not even put it in front of an underwriter. The reason they have stated is something on our credit report doesn't meet their criteria - we have checked our reports, both are 999 not even a late payment, they are spotless, our affordability isn't the issue either. They say they cannot tell us anymore, so we have had to raise a complaint.

Use somewhere like checkmyfile.com to check all the important credit agencies, not just Experian. Do look through all the details and especially the associations and fraud alerts.

MoodyAboutMortgages said:

My only thought on why this may be is that my income has been unstable the last 12m due to maternity leave, bonus months, and redundancy (I have a new job and have proved this). But they won't let me explain and evidence the reason for income fluctuation, if that's even the problem.

Are you already working at the new job and is the new salary reflected in your HMRC records?

If there are differences between what you have told them about your current salary and what HMRC are showing that might cause issues.

I am still on paid gardening leave until the end of Dec, start the new job at the beginning of Jan so no gap in employment or pay, I have based everything off my new salary as it's slightly less as I am dropping a day, but affordability is still ok and I have provided my last payslip and my new contract which they were happy with and met their criteria so I don't think it's specifically that.

Hoenir

MoodyAboutMortgages said:

MWT said:

MoodyAboutMortgages said:

HSBC have straight declined the application and will not even put it in front of an underwriter. The reason they have stated is something on our credit report doesn't meet their criteria - we have checked our reports, both are 999 not even a late payment, they are spotless, our affordability isn't the issue either. They say they cannot tell us anymore, so we have had to raise a complaint.

Use somewhere like checkmyfile.com to check all the important credit agencies, not just Experian. Do look through all the details and especially the associations and fraud alerts.

MoodyAboutMortgages said:

My only thought on why this may be is that my income has been unstable the last 12m due to maternity leave, bonus months, and redundancy (I have a new job and have proved this). But they won't let me explain and evidence the reason for income fluctuation, if that's even the problem.

Are you already working at the new job and is the new salary reflected in your HMRC records?

If there are differences between what you have told them about your current salary and what HMRC are showing that might cause issues.

I am still on paid gardening leave until the end of Dec, start the new job at the beginning of Jan so no gap in employment or pay,

HSBC internally are likely to have a criteria of at least 3/6/9/12 months in a new job role as a bare minimum. Lenders prefer stability. There are challenging times ahead. HSBC will certainly be cautious. We don't know the precise details of your application. But you've now also a financial dependent that will have been factored into the equation. 

The complaint is pointless. Commercial lending criteria is set high up at HSBC. Underwriters only have so much discretion. Nor is it the manner to proceed in terms of maintaining an on going business relationship in the future.