Mortgage lender pre-exchange checks help please

[NameyMcnameChange2]

I don’t know if I’m legitimately worrying or needlessly spiralling. Hoping that someone has knowledge or experience to reassure me.

We are about to exchange on a long drawn out house sale and purchase. Chain of three, we’re in the middle. We lost a buyer earlier this year hence why I’m already tense. Mortgage rates about to expire for us and our buyer. All very tense etc.

When we lost our first buyer, we sought a mortgage offer for a let-to-buy to keep our existing house AND purchase the new one, in the event that we couldn’t find another buyer. Happily we found another buyer quickly but the let-to-buy mortgage was approved. The offer is just sitting there as a backup plan, and will soon be moot because we’re about to exchange.

I was very open and honest to our residential lender HSBC, who offered us the residential mortgage for our new house. I sent them the let-to-buy offer and asked how it would affect the new residential mortgage. They said unfortunately they would have to do the whole application again because it’s a material change in circumstances etc, and they don’t do let-to-buy lending anyway so wouldn’t accept rental income for affordability.

So we said ok, not a problem as it’s a backup plan, not planning on going down that route unless we lose the second buyer, yadda yadda yadda. Mortgage advisor wished us luck with new buyer and confirmed no changes would need to be made if the sale continued.

Now here we are about to exchange and I realise that there is every chance we will be re-credit checked by HSBC. The let-to-buy application of course left a hard search on our reports. I’m worried that they will see that and just pull the mortgage. Obviously if they queried it we have a good explanation that the let-to-buy was a backup plan, and an email trail that confirms we let them know. But if they pull the offer, will there be opportunity for dialogue to discuss all this? Or will it be offer pulled, the end?

Points in our favour include:
⁃ Our credit scores are still high and we have no other lending other than existing mortgage which we are porting
We are (not quite) borrowing at maximum potential
⁃ We have a good deposit so are only borrowing 53% - I think this makes us lower end of the risk spectrum?

Reasons I’m freaking out in addition to the above essay:
⁃ HSBC are notoriously risk averse
⁃ Second buyer is paying £10k less than first; we didn’t need to increase lending as we had some flex in our savings but I never told HSBC about the lower offer (didn’t think to but now I’m wondering if that is a significant change in circumstance??)
⁃ We didn’t do the residential mtg via a broker so I don’t have an intermediary to deal with anything that comes up

Thanks if you’ve read this far… Any knowledge or experience most appreciated.

Little bump for the evening crowd

Your finances and credit are in really good order and I think you are panicking unnecessarily.

We did a mortgage application in May that we did not proceed with and bizarrely my other half's credit score has gone up massively since. I am talking 100 points.

Worst case, they are many far less panicky lenders out there than HSBC and you are not at the top of affordability.

Thanks for replying @KievLoverTwo, and that's good to know.

We also took out a consolidation loan in January and paid off 12k of CC debt the same month, so that may have a positive impact, but I would be very surprised if it took five months to work through to the score. He checks it monthly. I can only see the massive jump as being a result of being approved for a very large mortgage. Plus we completely stopped spending on any credit cards whatsoever.

Thanks @KievLoverTwo. It's good to know it hasn't adversely impacted your report.

I think my main worry is them seeing an additional mortgage approval on their credit check tools, and thinking that we might be attempting to draw down two mortgages on two different properties, and pulling the offer without investigating further. Even though I informed my advisor, it will be a different team doing second checks. And we are porting a favourable rate hence why I'm keen to stay with HSBC.

But I also know I am prone to catastrophising

Also with HSBC and had similar panic for similar reason! Was all fine. I am not sure they do a detailed credit check pre completion. Just check no defaults/CCJs.

Everyone is in this economy. It's not an unwise thing to do. Nobody's guaranteed a good mortgage the way they were last year. So, don't beat yourself up.

Thanks both of you, most appreciated.