My partner and I have recently passed the initial credit checks on a mortgage with HSBC, I have been advised that as the LTV is over 80% (90%) it has to be referred to their underwriting team check affordability and confirm that the details I have provided re: salary and regular commitments stack up. We both bank with them so they should be able to verify this with ease.
It is a joint mortgage for £123,750, with a proposed monthly payment of £760, and my partner and I have joint salary of £59,225. I have some regular credit commitments in the form of a staff loan from my employer and a credit card that amount to £655 per month. The loan is due to be repaid in 2014 and the credit card is slowly coming down. I understand that underwriter will annualise my credit commitments (using a 3% monthly payment on the balance of my credit card) and deduct this from my salary before organising multiples. My partner has no credit commitments so by my calculations this reduces our joint salary to £51,365 or a 2.4 joint salary multiple based on the mortgage we applied for.
Our joint monthly net income is £3,640. When we deduct the proposed mortgage payment along with all our regular commitments (credit, council tax, untilities, gym, mobiles, insurances) we have residual income of £1,778 per month in which to cover other discretionary spending such as petrol, food and entertainment.
I appreciate that salary multiples play some part (or even no part) in some lenders decision making. Does anyone have experience of HSBC are their underwriting requirements? In terms of affordability should I be including things like food and entertainment into my calulations? When I went through the applications the only commitments HSBC wanted to know about where those I listed?
I have read various reports of people being accepted in principle and then when the underwriters take a look the application is turned down. I also understand that HSBC are quite particular about the applicants they accept but I hope the fact we bank with them and run our accounts in a decent way that this will count for something!?
Any thoughts from people who have knowledge/experience of this would be greatly appreciated.
PS I should also state that neither of us have history of CCJ's/ Defaults.