HSBC Mortgages Rant
Discussion
This is obviously not going to make any difference to the problem but I fancy a good old rant anyway and maybe it might put someone off using HSBC for a mortgage 
We've decided on a loft conversion for our house to add an extra bedroom and en-suite. Had several quotes from various loft conversion companies and we're looking around £35k to do what we want. Got £18k in savings that we can contribute so approached our mortgage lender HSBC about adding £20k to our mortgage to pay for it. This is £3k more than we actually need but though a little contingency would be useful and if we didn't need it then would pay it straight back into the mortgage. Initially asked to see someone in the branch but it seems they don't like doing that any more so a two hour mortgage advice phone appointment was made for me.
I'm happy with the mortgage we have (aside from the fact it's with HSBC), it's a lifetime tracker at 1.49% above base so currently 1.99%. All I really wanted to do was add the additional borrowing to this and over the same remaining duration we have for the mortgage (15 years). I like the tracker as I don't have to get a new deal every 2-3 years and if I were able to then I can overpay as much as I like. There is also no tie-in. Seems however that this isn't possible.
So the phone call, first off she's on about changing us onto a different mortgage product (fixed/discounted) as it may be more cost effective for us. Spent ages trying to convince her that I didn't want anything other than the tracker we're already on. Secondly a lot of negotiation about LTV, yes it needs to be understood so we get the right rate but until they've sent their valuer round any value I give the property is meaningless as they'll always aim lower. Eventually decided that I should only borrow £18k instead of £20k to get us in a lower LTV band. Then asking how much I budgeted to pay for the additional borrowing, £250 a month was a figure off the top of my head, so she works out we could pay off the additional borrowing in 8 years (IIRC) should we have that as the term. Lot of explaining that whilst that is theoretically possible we don't want to over commit ourselves so actually stick to the 15 years remaining on the rest of the debt and if we have spare cash / we want to we'll overpay. This seemed to confuse things further. Finally the whole faff about affordability scoring so wages vs. outgoings in minute detail and nearly two hours later she says she'll call back the next day to follow up. Painful to say the least.
Expecting a phone call to say all good, sign the paperwork / send evidence and the money is yours, but no. Next phone call she tells me that the fees attached to the additional lending have changed overnight
Need to run though it again. Booking fee on the new loan was £299 with the 1.99% tracker rate, this has gone up to £499, she'd also failed to tell me that we'd be expected to pay for the valuation another £200, so £700 total fees on an £18k loan. I said this wasn't acceptable as it's too larger a % of the overall debt and effectively makes a large impact on the overall APR. Decided on the no-fee option which had a higher interest rate of 2.49% (would pay this lump off early as and when we have spare money). She then says she'll have to put all this into the system, will call back in 20 minutes.
Calls back 20 mins later to tell me my application has been declined. Apparently we don't meet the affordability criteria
I find this ridiculous, we were only looking at another £110 a month, could easily absorb this. I guess what screwed it up is the wife isn't working at the moment as the hours / commute in her old job wouldn't have worked around our eldest starting school in September. On our old combined incomes I'd have been asking some serious questions if they'd turned that down. She is going to look for new work from September onwards.
This alone has me fairly pissed off with them but when we shifted our mortgage to them in the first place the process was massively painful and quite a few mistakes were made along the way along with sitting in 10-15 minute phone queues when I needed to talk to someone.
So from my experiences - avoid HSBC at all costs.
Going to look at some alternative funding methods now and eventually I may well shift the whole mortgage form HSBC to someone else. Shame really as I like the product just not how they sell it
We've decided on a loft conversion for our house to add an extra bedroom and en-suite. Had several quotes from various loft conversion companies and we're looking around £35k to do what we want. Got £18k in savings that we can contribute so approached our mortgage lender HSBC about adding £20k to our mortgage to pay for it. This is £3k more than we actually need but though a little contingency would be useful and if we didn't need it then would pay it straight back into the mortgage. Initially asked to see someone in the branch but it seems they don't like doing that any more so a two hour mortgage advice phone appointment was made for me.
I'm happy with the mortgage we have (aside from the fact it's with HSBC), it's a lifetime tracker at 1.49% above base so currently 1.99%. All I really wanted to do was add the additional borrowing to this and over the same remaining duration we have for the mortgage (15 years). I like the tracker as I don't have to get a new deal every 2-3 years and if I were able to then I can overpay as much as I like. There is also no tie-in. Seems however that this isn't possible.
So the phone call, first off she's on about changing us onto a different mortgage product (fixed/discounted) as it may be more cost effective for us. Spent ages trying to convince her that I didn't want anything other than the tracker we're already on. Secondly a lot of negotiation about LTV, yes it needs to be understood so we get the right rate but until they've sent their valuer round any value I give the property is meaningless as they'll always aim lower. Eventually decided that I should only borrow £18k instead of £20k to get us in a lower LTV band. Then asking how much I budgeted to pay for the additional borrowing, £250 a month was a figure off the top of my head, so she works out we could pay off the additional borrowing in 8 years (IIRC) should we have that as the term. Lot of explaining that whilst that is theoretically possible we don't want to over commit ourselves so actually stick to the 15 years remaining on the rest of the debt and if we have spare cash / we want to we'll overpay. This seemed to confuse things further. Finally the whole faff about affordability scoring so wages vs. outgoings in minute detail and nearly two hours later she says she'll call back the next day to follow up. Painful to say the least.
Expecting a phone call to say all good, sign the paperwork / send evidence and the money is yours, but no. Next phone call she tells me that the fees attached to the additional lending have changed overnight
Need to run though it again. Booking fee on the new loan was £299 with the 1.99% tracker rate, this has gone up to £499, she'd also failed to tell me that we'd be expected to pay for the valuation another £200, so £700 total fees on an £18k loan. I said this wasn't acceptable as it's too larger a % of the overall debt and effectively makes a large impact on the overall APR. Decided on the no-fee option which had a higher interest rate of 2.49% (would pay this lump off early as and when we have spare money). She then says she'll have to put all this into the system, will call back in 20 minutes.Calls back 20 mins later to tell me my application has been declined. Apparently we don't meet the affordability criteria
I find this ridiculous, we were only looking at another £110 a month, could easily absorb this. I guess what screwed it up is the wife isn't working at the moment as the hours / commute in her old job wouldn't have worked around our eldest starting school in September. On our old combined incomes I'd have been asking some serious questions if they'd turned that down. She is going to look for new work from September onwards.This alone has me fairly pissed off with them but when we shifted our mortgage to them in the first place the process was massively painful and quite a few mistakes were made along the way along with sitting in 10-15 minute phone queues when I needed to talk to someone.
So from my experiences - avoid HSBC at all costs.
Going to look at some alternative funding methods now and eventually I may well shift the whole mortgage form HSBC to someone else. Shame really as I like the product just not how they sell it
We transferred our HSBC mortgage to a 1.5% First Direct offset tracker mortgage. We then needed an extra £35K for an extension and they allowed us to take out any the money we had paid in from the last 10 years and take out an additional tracker mortgage at 2.99% to make up the £35K. No fees and just a couple of short calls, definitely recommend First Direct - was about 4 years ago so rates will have changed.
I have also found HSBC to be very difficult to deal with and they seem to have very antiquated / convoluted systems in place, when I have had accounts with them previous.
Can you take out a personal loan for the required amount. Obviously you won't get a low % as the mortgage but it would be one option to fund the loft extension.
Can you take out a personal loan for the required amount. Obviously you won't get a low % as the mortgage but it would be one option to fund the loft extension.
I am sure Sarnie can confirm but I strongly suspect what you experienced is nothing to do with HSBC and all to do with the new regs around lending.
The affordability criteria, quite rightly, are a LOT more strict now.
For example:
Of course they need to value your house appropriately.
Of course they want you to pay everything off as quickly as possible.
Of course they have to check your income multiples.
Changing the rates overnight always happens - you need to pay the fee to secure the rate, I thought everyone knew that?
Honestly, this post sounds a little like someone whinging that the banks had to be bailed out and then complaining his new start-up selling ice to eskimos can't get funding.
Getting a brand new mortgage (which is what it almost always comes down to) isn't a simple process these days and rightly so, IMHO.
The affordability criteria, quite rightly, are a LOT more strict now.
For example:
Of course they need to value your house appropriately.
Of course they want you to pay everything off as quickly as possible.
Of course they have to check your income multiples.
Changing the rates overnight always happens - you need to pay the fee to secure the rate, I thought everyone knew that?
Honestly, this post sounds a little like someone whinging that the banks had to be bailed out and then complaining his new start-up selling ice to eskimos can't get funding.
Getting a brand new mortgage (which is what it almost always comes down to) isn't a simple process these days and rightly so, IMHO.
Ooohhh not seen a good old HSBC mortgages rant in a while 
This is now the downside of dealing with a lender direct.
The FCA have deemed that almost all mortgage transactions now have to be advised. Banks used to be able to provide an "Information Only" service meaning that they just gave you the facts and figures, you made your decision and if it went wrong it was your own fault. What you mentioned about the term is key. They cannot be seen to be encouraging you to have it over a longer term and have to evidence that their advice was aimed at getting the loan paid off as soon as possible rather than getting the payment down on a longer term, which would earn them more money.
Lenders now have to take responsibility for their own advice, which means they put you through an excruciating process at times, which I suppose is bearable if you get the right result at the end.
I could have told you in five minutes what they took so long to tell you.......
This is now the downside of dealing with a lender direct.
The FCA have deemed that almost all mortgage transactions now have to be advised. Banks used to be able to provide an "Information Only" service meaning that they just gave you the facts and figures, you made your decision and if it went wrong it was your own fault. What you mentioned about the term is key. They cannot be seen to be encouraging you to have it over a longer term and have to evidence that their advice was aimed at getting the loan paid off as soon as possible rather than getting the payment down on a longer term, which would earn them more money.
Lenders now have to take responsibility for their own advice, which means they put you through an excruciating process at times, which I suppose is bearable if you get the right result at the end.
I could have told you in five minutes what they took so long to tell you.......
Dan_The_Man said:
We transferred our HSBC mortgage to a 1.5% First Direct offset tracker mortgage. We then needed an extra £35K for an extension and they allowed us to take out any the money we had paid in from the last 10 years and take out an additional tracker mortgage at 2.99% to make up the £35K. No fees and just a couple of short calls, definitely recommend First Direct - was about 4 years ago so rates will have changed.
HSBC own First Direct as well though you hear nothing but praise for them. Unfortunately on the basis of my dealings with HSBC so far I wouldn't use First Direct either.walm said:
I am sure Sarnie can confirm but I strongly suspect what you experienced is nothing to do with HSBC and all to do with the new regs around lending.
The affordability criteria, quite rightly, are a LOT more strict now.
For example:
Of course they need to value your house appropriately.
Of course they want you to pay everything off as quickly as possible.
Of course they have to check your income multiples.
Changing the rates overnight always happens - you need to pay the fee to secure the rate, I thought everyone knew that?
Honestly, this post sounds a little like someone whinging that the banks had to be bailed out and then complaining his new start-up selling ice to eskimos can't get funding.
Getting a brand new mortgage (which is what it almost always comes down to) isn't a simple process these days and rightly so, IMHO.
Indeed.The affordability criteria, quite rightly, are a LOT more strict now.
For example:
Of course they need to value your house appropriately.
Of course they want you to pay everything off as quickly as possible.
Of course they have to check your income multiples.
Changing the rates overnight always happens - you need to pay the fee to secure the rate, I thought everyone knew that?
Honestly, this post sounds a little like someone whinging that the banks had to be bailed out and then complaining his new start-up selling ice to eskimos can't get funding.
Getting a brand new mortgage (which is what it almost always comes down to) isn't a simple process these days and rightly so, IMHO.
For some, it can still be a fairly simple, quick and painless process. These people are getting few and far between now (young, no kids, perfect credit score, no credit commitments, PAYE, low LTV, high income).
For others, they may have previously been deemed to be a fairly simple case, but a small change in circumstances and change all that.
The OP is a perfect example. It sounds like both he and his Wife were working, pre-children perhaps, and mortgages would have been easy for them. Fast forward a few years and now we have one salary, and two financial dependants in the none working wife and child. Lenders now make deductions from your affordability not only for credit commitments but also for how many dependants you have, throw in a hefty childcare bill every month and the lending landscape will have changed dramatically. I often have people tell me that they approached their current lender first who have said that under the new regulations, they can't even afford the mortgage they already have......
Mandat said:
Can you take out a personal loan for the required amount. Obviously you won't get a low % as the mortgage but it would be one option to fund the loft extension.
Sort of thing I'm looking at. Main problem with personal loans is the repayment tends to be over 5 years or less. We could do it but it would involve some serious belt tightening for a while and does rely on the wife getting a job sometime soon.I told her to give up the old job in preference to looking after / spending time with our kids and to be honest I'm not that bothered as to when she goes back to work. We can manage without the extra income although it was a nice to have.
I wonder if we go ahead with the work using some unsecured lending and then revisit the whole mortgage situation with an IFA once the work is done and we get hopefully get a higher value on the house. I think we managed to get the mortgage with HSBC just before the new regulations came in so it was very much my choice, shame it is now becoming so difficult for anyone with enough financial know how to make their own decisions. The last IFA we used was pretty useless as I pretty much ended up telling him which mortgage we'd be going with based on my own research but still got charged £300 for his advice. Hence I went it alone the next time round. I suppose the fee does save a lot of toing and froing with the lender and all the form filling etc.
Will try a different IFA next time around.
To balance the view perhaps, i'm an HSBC customer and around 6months ago switched to the same tracker and the process couldn't have been smoother. I was offered the chance to deal either on the phone or local branch - i opted for in-branch, and it took a one hour meeting w/ mortgage chappie, concluding around a month later. The only delay in that was my fault as i struggled to find time for the surveyor.
walm said:
I am sure Sarnie can confirm but I strongly suspect what you experienced is nothing to do with HSBC and all to do with the new regs around lending.
The affordability criteria, quite rightly, are a LOT more strict now.
For example:
Of course they need to value your house appropriately.
Of course they want you to pay everything off as quickly as possible.
Of course they have to check your income multiples.
Appreciate that, I knew the regulations had changed but unfortunately they may have gone a bit too far the other way.The affordability criteria, quite rightly, are a LOT more strict now.
For example:
Of course they need to value your house appropriately.
Of course they want you to pay everything off as quickly as possible.
Of course they have to check your income multiples.
walm said:
Changing the rates overnight always happens - you need to pay the fee to secure the rate, I thought everyone knew that?
Again, I did know that but we weren't in a position to book after just the first phone call.walm said:
Honestly, this post sounds a little like someone whinging that the banks had to be bailed out and then complaining his new start-up selling ice to eskimos can't get funding.
Getting a brand new mortgage (which is what it almost always comes down to) isn't a simple process these days and rightly so, IMHO.
You'll not here me whinge about the bail outs etc. Bad decisions were made and luckily HM Gov were able to stop the whole financial system going tits up, not ideal but sh*t happens. What I'm whinging about is the fact I have 60% LTV, a high income, good credit score, and yet all I want to borrow is is measly £18k costing £110 a month and they can't even offer me that thanks to the new regs. Getting a brand new mortgage (which is what it almost always comes down to) isn't a simple process these days and rightly so, IMHO.
I could go and buy a car for that tomorrow on PCP and they'd be no trouble approving it. C0ffin D0dger said:
...all I want to borrow is is measly £18k costing £110 a month and they can't even offer me that thanks to the new regs. I could go and buy a car for that tomorrow on PCP and they'd be no trouble approving it.
I think I probably agree the new regs have gone too far. I could go and buy a car for that tomorrow on PCP and they'd be no trouble approving it. But the problem is that you aren't looking for £18k... you're looking for a whole new mortgage!!
I don't usually think the yanks have many good ideas on the finance front but over there a "second" mortgage is very common and if we had those here you really would be looking to finance just £18k secured on that 40% equity you have in the house.
People would be falling all to lend to you!
walm said:
C0ffin D0dger said:
...all I want to borrow is is measly £18k costing £110 a month and they can't even offer me that thanks to the new regs. I could go and buy a car for that tomorrow on PCP and they'd be no trouble approving it.
I think I probably agree the new regs have gone too far. I could go and buy a car for that tomorrow on PCP and they'd be no trouble approving it. But the problem is that you aren't looking for £18k... you're looking for a whole new mortgage!!
I don't usually think the yanks have many good ideas on the finance front but over there a "second" mortgage is very common and if we had those here you really would be looking to finance just £18k secured on that 40% equity you have in the house.
People would be falling all to lend to you!
Edited by Mandat on Friday 10th July 16:16
Know exactly what you mean.
Had a look at them not too long ago and they came back and apparently I cannot afford even 1/3 rs of the mortgage I currently have and have had the last 10 years.
When I challenged them with that they struggled with a response. So I said let me extend one of my buy to let mortgages (one with them) took 30mins and way way more than I needed decided to do this just in case any such nonsense happens again.
I asked her so how come this is affordable when the other wasn't and rent isn't increasing?.... Just the new regulations... Nuts.
Had a look at them not too long ago and they came back and apparently I cannot afford even 1/3 rs of the mortgage I currently have and have had the last 10 years.
When I challenged them with that they struggled with a response. So I said let me extend one of my buy to let mortgages (one with them) took 30mins and way way more than I needed decided to do this just in case any such nonsense happens again.
I asked her so how come this is affordable when the other wasn't and rent isn't increasing?.... Just the new regulations... Nuts.
Welshbeef said:
Know exactly what you mean.
Had a look at them not too long ago and they came back and apparently I cannot afford even 1/3 rs of the mortgage I currently have and have had the last 10 years.
When I challenged them with that they struggled with a response. So I said let me extend one of my buy to let mortgages (one with them) took 30mins and way way more than I needed decided to do this just in case any such nonsense happens again.
I asked her so how come this is affordable when the other wasn't and rent isn't increasing?.... Just the new regulations... Nuts.
Ive had no issues at all with HSBC...Had a look at them not too long ago and they came back and apparently I cannot afford even 1/3 rs of the mortgage I currently have and have had the last 10 years.
When I challenged them with that they struggled with a response. So I said let me extend one of my buy to let mortgages (one with them) took 30mins and way way more than I needed decided to do this just in case any such nonsense happens again.
I asked her so how come this is affordable when the other wasn't and rent isn't increasing?.... Just the new regulations... Nuts.
sorted out my remortgage without fuss and did so without charge and gave me a good rate.
Shame it took nearly 3 months to do, think I bought the property quicker than that.
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