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Starting to save for a morgage-credit history?

  • 13-01-2019 12:05am
    #1
    BilboBagOfCans
    Registered Users Posts: 70 ✭✭


    Hi guys,
    I'm 27 and planning on saving for my own place in a few years. I reckon for where I want to live I'll need a deposit of 25k so I want to set up a regular savings account to start working towards this.
    I have never taken out a loan so my credit history is 0. I've lived abroad for a few years so I've had a few different bank accounts, but I've never been into my overdraft. I've saved in the past but I have had to dip into it sometimes to cover big costs.
    My queries are:
    -Am I better off getting a credit card to start building up a credit history ( I know I could meet the money)
    - I plan on trying to save 500 minimum per month. Is it better to do this and then if I have extra money to put it in rather than save more and potentially have to dip into it?
    -Is something like the BOI morgage saver account worth it over a normal savings account?

    I was also wondering how far back into bank account statements do banks go? I'm not planning on buying for another 4 years so I'm wondering would they go this far back?

    Thanks


Comments

  • #2
    Prospector1989
    Registered Users Posts: 212 ✭✭Prospector1989


    Currently dealing with a broker, hoping for approval in the next few weeks. Advice we were given.

    -Ability to meet repayments - Ensure you're outgoings (Rent + Savings or Savings depending on your current situation) are greater than what your mortgage repayments will be.
    -In his opinion, not having a credit card, is better than having a credit card (even if you keep on top of the repayments). We had a CC and were told to clear it before applying and to avoid using it if possible. We never missed a payment so having it ultimately, wasn't an issue. If you do get a CC, don't withdraw cash using it.
    -Started with the broker in October and he requested statements as far back as April. (Banks can request more but the most I've heard is 12 months).
    -I'm not sure how dipping into savings looks, maybe save what your repayments would be and put extra aside into a separate account to save you dipping into your savings?
    -Other advice
    --avoid online gambling
    --show you can manage your money (don't blow through most of your money in the first week after payday).


  • #3
    Thoie
    Registered Users, Registered Users 2 Posts: 6,344 ✭✭✭Thoie


    BilboBagOfCans wrote: »

    I was also wondering how far back into bank account statements do banks go? I'm not planning on buying for another 4 years so I'm wondering would they go this far back?

    Thanks

    Can't help with the rest of it, but from experience last year, hang on to bank statements, pay slips and utility bills from now until you've got the mortgage. You can always shred them later, but I was surprised at some of the paperwork I was asked for. Looking back through my "folder of stuff", it looks like I was asked to produce bank statements, credit cards statements and sundry other paperwork for the previous 18 months before I applied.

    I hadn't moved house during that time, but if you move house in the preceding 3-5 years they may start looking for things like utility bills from the previous address. I had gone paperless for all my bills, but that turned out to be a bit of PITA. I had switched utility company at one point, and no longer had an account with one, so couldn't access the online statements. While it may be less environmentally friendly, it may be worth while moving back to paper bills for at least one utility now, and holding on to those, in case you move between now and the mortgage application.

    I had a regular monthly savings account that I dipped into from time to time, but not every month. I generally dipped into it for Christmas/holidays. Like you, I had a regular amount that went in, and if I had anything left over at the end of the month, I topped it up. So in your example, if you can put €500 a month away without dipping in every month, but putting €600 away would require constantly taking a few quid at the end of the month, go with the €500.

    I don't know how true this is, but one of the banks/brokers I spoke to said something like "they're looking to see if you gamble". This is all hearsay, but I got the impression they were looking at your bank statements for things like proof of regular income, living within your means, but also for "red flags" like large unaccounted for cash withdrawals, or online gambling accounts.


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