saving account or current account?

[mihaela]

Hi all,


I've opened a savings account months ago. I was advised in the bank that i get better interest on the reggular savings account, but the limit that is 500. So basically now i have a few hundreds adding up monthly, in each account. Question: do i have to change this, or is all good as long as they can see the track of savings?


Also i'd like to know if you have to get rid of the credit card before you apply for a mortgage. I've a small limit (i only use it for booking flights or e-bay) and i'm not sure if that's gonna affect my application.

 

[Boyd]

IMO having a CC while applying for mortgage is not a problem, everyone has a CC these days nearly (*assuming you dont have a 10K outstanding balance on it!!)

Not sure what youre asking re: savings account. You can only save what you can afford and you will always get a better interest rate in a savings account vs current account

 

[44brendan]

Also i'd like to know if you have to get rid of the credit card before you apply for a mortgage. I've a small limit (i only use it for booking flights or e-bay) and i'm not sure if that's gonna affect my application.

No worries abvout this re mortgage application.

 

[mihaela]

IMO having a CC while applying for mortgage is not a problem, everyone has a CC these days nearly (*assuming you dont have a 10K outstanding balance on it!!)

Not sure what youre asking re: savings account. You can only save what you can afford and you will always get a better interest rate in a savings account vs current account[/QUOTE

No, no outstanding balance on it! Thank God!

I was trying to say that....let's say i save 1k each month. 500 is going into savings and the other 500 adds up in the current account. Will the balance from current account be looked at as savings also? Or i should raise the limit on the savings account?

 

[becky]

IMO having a CC while applying for mortgage is not a problem, everyone has a CC these days nearly (*assuming you dont have a 10K outstanding balance on it!!)

Not sure what youre asking re: savings account. You can only save what you can afford and you will always get a better interest rate in a savings account vs current account[/QUOTE

No, no outstanding balance on it! Thank God!

I was trying to say that....let's say i save 1k each month. 500 is going into savings and the other 500 adds up in the current account. Will the balance from current account be looked at as savings also? Or i should raise the limit on the savings account?

Yes but keep a credit balance or a minimum balance to avoid charges. You should look at the best buys and put lump sums away into 1 year or 6 month accounts depending on when you need it.

Have a fund for unexpected expenses. I had to spend €150 last week for a car window motor thing.

Put money away for annual bills like car tax, insurance, bins etc. I have a demand saver for that. Pay with credit card and transfer the money into the credit card before you have to pay interest.

 

[mihaela]

Will do! Thank you for the answers guys

 

[LDFerguson]

From the perspective of a future mortgage application, just make sure that your savings of €1,000 per month in total are easy to document. A mortgage lender doesn't really care what type of account you accumulate your savings in; as long as they can easily see that you're saving €1,000 per month regularly.

Be careful with accumulating savings in a current account, if thinking about a mortgage application. If you're leaving €500 per month in the current account each month, then the balance at the end of the month should be going up consistently - €500, €1,000, €1,500 and so on. If you're doing this for a while but then taking some out, it won't be viewed as savings for a mortgage application.