Help! We need to start saving!

SmokeyEyes

We're a couple currently living at home (Dublin) and want to start a savings account this month that would be used to show our savings towards a mortgage. Can anyone recommend what the best bank to do this with would be as they'll be who we end up trying to go for a mortgage with?

Also, realistically, how long do we need to be saving (and roughly how much) to prove to banks we're capable of paying a modest mortgage and would rent receipts be more beneficial in showing we're able to support ourselves as we plan to move out and rent this year.

Thanks so much to anyone who can help!

SmokeyEyes

SmokeyEyes wrote: »

Also, realistically, how long do we need to be saving (and roughly how much) to prove to banks we're capable of paying a modest mortgage and would rent receipts be more beneficial in showing we're able to support ourselves as we plan to move out and rent this year.

Are you living rent free at the moment?

Personally I'd rather have 10k in the bank than receipts for 10k's worth of rent.

SmokeyEyes

We are but we're very much ready to live alone at this stage so while it makes sense to live rent free, our desire to get some place of our own, even if that means renting, is greater:)

Glenbhoy

Your rent plus your regular monthly savings are key determinants as to the size of mortgage you can service.

In other words, rent + regular savings = mortgage repayment. The banks then work back from this figure to see how much they can loan you.

Of course other factors such as credit history, kids, job security etc will also be considered, but if you can get the regular saving sorted, it'll be half the battle.

By the way, you need at least six months worth, but starting from scratch, I'd aim to be in a position to apply for a mortgage in about 18 months time.

SmokeyEyes

Glenbhoy wrote: »

Your rent plus your regular monthly savings are key determinants as to the size of mortgage you can service.

In other words, rent + regular savings = mortgage repayment. The banks then work back from this figure to see how much they can loan you.

Of course other factors such as credit history, kids, job security etc will also be considered, but if you can get the regular saving sorted, it'll be half the battle.

By the way, you need at least six months worth, but starting from scratch, I'd aim to be in a position to apply for a mortgage in about 18 months time.

Thanks good advice!

Any tips on which bank would be best to start saving with with an idea of getting a mortgage with them? We're both with BOI at the moment but willing to move

Duckjob

SmokeyEyes wrote: »

Any tips on which bank would be best to start saving with with an idea of getting a mortgage with them? We're both with BOI at the moment but willing to move

It won't make any difference what bank you save with and which one you get a mortgage from. None will give you preferential treatment (be more likely to loan to you etc) because you're a savings customer with them. Only difference is your savings bank will be able to more easily verify your account/savings info across branches without you having to provide them with a ton of statements.

xper

Here's your homework OP:
http://www.askaboutmoney.com/showthread.php?t=90481
As you are starting out saving and so presumably do not have any sort of lump sum to kick off with, you'll be looking at the Regular Savings options.

I'd agree with Duckjob, focus on getting the best interest rate for your savings while ensuring you have adequate access to it. When it comes to actually applying for a mortgage, go to a broker and let him find the best product for you. Staying with one bank for all your personal financial needs throughout your life is a thing of the past.

Slunk

Open an online savings account with advance notice withdrawal so you wont dip into your savings for petty things. I have one with aib and have to give seven days notice to withdraw. Stops impulse buys etc. Keep all your rent receipts and try have a paper trail for everything you spend. I have my bills on DD and have it set up to show 'Rent' and 'Savings' coming from my current account.

AlmightyCushion

The best rate right now is with Permanent TSB. 3.5% and you can save up to €1,000 a month.

SmokeyEyes

Thanks so much everyone:), really appreciate the advice!!