A Guide on what to do if you Have a Declined Mortgage Application with HSBC:

Applying for a mortgage is a significant financial step, and receiving a decline from a lender like HSBC can be disheartening.

However, it’s essential to understand that a declined application doesn’t signify the end of your homeownership dream. By understanding the reasons behind the decline and exploring alternative options, you can give yourself the best chance of a successful mortgage application.

Common Reasons for HSBC Mortgage Application Declines

HSBC, like all lenders, have specific criteria to assess mortgage applications. Understanding these can help you identify potential areas of improvement:

• Affordability Concerns: HSBC evaluates whether your income can comfortably cover the mortgage repayments. If they determine that the loan amount exceeds what you can afford, they may decline the application.
• Credit History Issues: A poor credit score, missed payments, or significant credit events like County Court Judgments (CCJs) can lead to a decline. HSBC scrutinises your credit report to assess your financial reliability.
• Insufficient Deposit: A deposit of less than 10% may not meet HSBC’s lending criteria, leading to a declined application.
• Self-Employment Factors: If you’re self-employed with less than two years of accounts, HSBC may view your income as unstable, resulting in a declined application.
• Existing Financial Commitments: High levels of existing debt or financial commitments can impact your affordability assessment, leading to a decline.
• Property Concerns: The property’s value, condition, or type might not meet HSBC’s lending criteria, especially if it’s deemed non-standard or high-risk.

Immediate Steps After a Declined Application

1. Communicate with HSBC: Reach out to HSBC to gain clarity on the specific reasons for the decline. Understanding the exact factors will guide your next steps.
2. Review Your Credit Report: Obtain your credit report, we recommend checkmyfile, to identify any inaccuracies or areas of concern. Addressing these can improve your creditworthiness.
3. Assess Your Financial Situation: Evaluate your income, expenses, and existing debts. Creating a realistic budget can help you understand your borrowing capacity.

How Mortgage Experience Can Help You Secure a Mortgage

If your mortgage application has been declined by HSBC, Mortgage Experience is best placed to help you find a lender who will accept your application. We have over 30 mortgage and protection advisers who specialise in assisting clients who have been declined, using their extensive knowledge of the mortgage market to find the right lender for your situation.

Sometimes, a mortgage decline isn’t due to bad credit but simply because your circumstances do not align with HSBC’s specific criteria. For example:

• Complex Income Streams: You could be a high earner with excellent credit, but if you have multiple income streams that HSBC considers too complex, they may decline your application. However, other lenders specialise in cases like yours and are more willing to accept your income structure.
• Life Events Impacting Credit History: Events such as divorce, the passing of a loved one, or temporary ill health can cause a short-term impact on your financial situation, leading to missed payments. While HSBC may reject an application based on this, other lenders take a more flexible approach, considering your overall financial history and current stability.

Our advisers have years of experience in dealing with these types of complex cases. We understand the criteria of different lenders and know exactly where to apply to give you the best chance of securing a mortgage. Unlike banks that only offer their own mortgage products, we have whole-of-market access, meaning we can source mortgage deals from a vast array of lenders, ensuring you get the most suitable mortgage for your situation.

The Role of a Mortgage Broker

Engaging with a mortgage broker can be instrumental in navigating the complexities of mortgage applications:

• Access to Diverse Lenders: Brokers have relationships with various lenders, including those who may have more flexible criteria than HSBC.
• Tailored Advice: They can provide personalised guidance based on your financial situation, helping you identify suitable mortgage products.
• Application Support: Brokers assist in presenting your application effectively, highlighting strengths and mitigating potential concerns.

Mortgage Experience boasts over 100 years of combined experience in handling complex mortgage cases. Our expertise lies in understanding the client and their goals, the various and diverse lender criteria and presenting cases effectively to achieve successful outcomes.

Strategies to Strengthen Future Applications

• Enhance Your Credit Profile: Ensure timely payments, reduce outstanding debts, and avoid new credit commitments to improve your credit score.
• Increase Your Deposit: Saving for a larger deposit can make you a more attractive borrower, potentially unlocking better mortgage deals.
• Stabilise Employment: Maintaining consistent employment or demonstrating stable self-employed income can alleviate lenders’ concerns about income stability.
• Seek Professional Guidance: Consulting with experienced mortgage brokers, like those at Mortgage Experience, can provide insights into lenders more suited to your circumstances and assist in crafting a compelling application.

Conclusion

A declined mortgage application from HSBC is undoubtedly a setback, but it’s not the end of the line. By understanding the reasons behind the decline, taking proactive steps to address them, and leveraging the expertise of seasoned mortgage brokers, you can enhance your chances of securing a mortgage. Remember, persistence, preparation, and professional guidance are key to navigating the path to homeownership successfully.