Mortgage Advisor & Director
Mortgage Advisor & Director
If you’ve had an HSBC mortgage application declined it can be deflating, but it doesn’t mean you’d necessarily be rejected elsewhere. Every mortgage lender has their own specific criteria, so it’s possible to be declined by one lender and accepted by another.
However, if you don’t meet HSBC’s requirements, it’s important to find a lender with criteria that matches your circumstances. In this article we look at some of the reasons HSBC might decline your mortgage application, and how, at Teito, we can help you to find a solution.
Why would HSBC decline a mortgage application?
HSBC are a high street bank with fairly rigid application criteria, so they’re likely to decline any mortgage application where their criteria is not fully met. Some of the most common reasons you may have a mortgage application rejected by HSBC are:
Not passing the credit search
HSBC’s mortgage underwriters tend to be strict when it comes to bad credit mortgage applications. If you have an IVA, a debt management plan, or even arrears on an existing debt, they are unlikely to approve your application. They also usually reject applicants with CCJs (County Court Judgements) that are less than 3 years old.
If you’re considering using a guarantor to aid with your bad credit application, it’s worth noting that HSBC unfortunately don’t offer guarantor mortgages. However, there are plenty of mortgage lenders who do accept this type of application, so reach out to one of our brokers for further information on how to apply via this route.
Less than 10% deposit
HSBC will lend at a maximum of 90% LTV, so you’ll need at least 10% deposit in order to apply for a mortgage with them. It’s also worth noting that they usually cap their borrowing at 4.49 times your annual income, which is slightly below the typical average of 4.5.
Self-employed with less than 12 months’ accounts
Although HSBC offers self-employed mortgages, they ask for at least 12 months’ accounts as proof of income. In many cases they prefer to have 2-3 years of continuous self-employed earnings, so newly self-employed applicants are unlikely to be approved for a mortgage.
Survey related issues
HSBC may reject an application post-survey if they discover that the property doesn’t meet their criteria. They can be strict with non-standard construction properties, such as single skin construction or steel frame construction, for example. They may also decline the application after valuation if they feel that the property has been over-valued.
What to do if they have rejected you for a mortgage
Here are the steps to follow if HSBC have turned you down for a mortgage:
1. Don’t panic - If you’ve had an HSBC mortgage rejected, fear not, there are over 90 alternative lenders, meaning it’s possible another will accept you, no matter why your original application was declined
2. Find out why you were declined - Knowing why you were declined for a mortgage puts you in a position of power, as it can help you avoid being rejected again for the same reason next time you apply. Be sure to obtain copies of your credit report and any property surveys before reapplying
3. Speak to an expert - Speaking to an expert like us before you re-apply could be the difference between approval and another rejection, so it’s a step you shouldn’t bypass. Multiple declined credit applications can further impact your credit record, whereas we can review your reasons for rejection and recommend a more suitable lender
Get your mortgage plans back on track today
Are HSBC a strict mortgage lender?
HSBC are a fairly standard high street lender, so they tend to have a similarly strict stance against applications on bad credit, and other higher risk applications, such as self-employed people without at least one year’s trading history and accounts.
The good news is, there are a range of more specialist lenders that would not reject for the same reasons as HSBC. That’s where we come in.
How we can help get your plans back on track
If you’ve had HSBC decline a mortgage, it can be disheartening. However, don’t assume that’s the end of your home ownership journey. Seeking professional help and guidance can be the difference between securing a mortgage or not.
At Teito, our team of experienced brokers secure mortgages for applicants who have previously been declined by high street lenders like HSBC every day. We can often negotiate with them on your behalf, which can lead to a more favourable outcome. Failing that, we also have access to the whole of the mortgage market, which means that we can look at securing alternative lenders whose criteria you’re able to meet more easily.
Whether you need advice to improve your credit rating or finances before making your next application, or suggestions on how to overcome property-related obstacles, reach out today for a free, no-obligation consultation.
Other customers with declined mortgage applications chose use because:
- Our brokers specialise in mortgage rejections at any stage of the process
- We offer a free, no obligation, initial consultation
- We are 5-star rated across many leading review sites
- We can help you prevent any further declined applications by steering you away from the wrong lenders for your circumstances
Ready to take advantage of a free, no-obligation chat with a broker who specialises in overturned mortgage rejections? Get started here.
FAQs
A mortgage agreement in principle (MIP or AIP) from HSBC is not a guarantee that your mortgage application will be accepted, so is not an offer. This means that the offer won’t be ‘withdrawn’ as it was not really on the table at MIP stage.
It’s perfectly possible to be declined after an MIP is provided, however, if it’s completed correctly and checked by a broker, like ourselves, then there is less chance of this happening. Typically if you disclose everything that you think the lender needs to know at this stage, there will be less chance that your mortgage application is declined.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.