First TIme buyer - Bank switching question
Discussion
I'm in the process of looking for my first property and have noticed that many lenders give preferrential rates for customers who have their current accounts with them.
A colleague of mine has said that switching banks this close to me starting the process could harm my chances of getting a mortgage.
Is there any truth in this statement?
A colleague of mine has said that switching banks this close to me starting the process could harm my chances of getting a mortgage.
Is there any truth in this statement?
You don't actually need to "switch" your entire bank account.
For a current account and to qualify for these preferential deals, you only need to have a certain amount of money moving through the account.
You can still receive your salary in your current account, sent some or all of the money to your new account at bank of choice and move a few direct debits or other payments/expenses over to the new account.
That way you will have the history of the old account when applying for a new mortgage and the bank will see that you have an active account with them - qualifying you for a preferential rate, if available.
Once your mortgage is set up, arrange the account as you wish and close the old one if you want.
For a current account and to qualify for these preferential deals, you only need to have a certain amount of money moving through the account.
You can still receive your salary in your current account, sent some or all of the money to your new account at bank of choice and move a few direct debits or other payments/expenses over to the new account.
That way you will have the history of the old account when applying for a new mortgage and the bank will see that you have an active account with them - qualifying you for a preferential rate, if available.
Once your mortgage is set up, arrange the account as you wish and close the old one if you want.
jonesey said:
I'm in the process of looking for my first property and have noticed that many lenders give preferrential rates for customers who have their current accounts with them.
A colleague of mine has said that switching banks this close to me starting the process could harm my chances of getting a mortgage.
Is there any truth in this statement?
Beware that some of these lenders require you to have had the account with them for 6 months or more BEFORE you make your application...A colleague of mine has said that switching banks this close to me starting the process could harm my chances of getting a mortgage.
Is there any truth in this statement?
Most of these banks now insist that you transfer all your direct debits and/or use their switching service which "makes it easier for you" = "causes you so many issues it's not worth doing".
If you can open a new account, I'd keep the old one open, transfer MOST of the DDs by giving the new bank a written list, and go from there.
This way, if you get asked questions later on about "how long have you had your bank account" you can use the older one.
If you can open a new account, I'd keep the old one open, transfer MOST of the DDs by giving the new bank a written list, and go from there.
This way, if you get asked questions later on about "how long have you had your bank account" you can use the older one.
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