Saving/Applying for a mortgage 2020-22 Edition

CBear1993 wrote: »

When you say your savings accounts do you all mean with a separate bank?

I’m with AIB and just have a savings account alongside the current account. But sure it’s very handy to just transfer between the two even on the phone app?

I divide savings each month into a northern Irish bank account, AIB down here and credit union. Can’t see how that would be frowned upon my future mortgage application reviewer?

When I transferring the deposit to my solicitor (you don't transfer any money to your bank), it was transfer from my KBC savings (instant) and credit union (one day) to my current account then do transfer from current account to solicitors bank account.

The bank doesn't really care where you save your money as long as it's simple for them to see where the money is going. compare and contrast:

person 1: saves 1500 a month on the 12th of every month, and it goes into a single savings account, which shows zero withdrawals.

person 2: saves 1500 a month on the 5th of every month, it's split evenly between Credit union, Bank A savings account, Bank B savings account.

person 3: lumps everything into the current account and builds up a balance, some months they have 1500 a month left over, but other months 1200, and other months 1334.53.


Which scenarios are easier to see a record of regular savings? 1 and 2 right? Person 3 you have to run through each transaction to see where the savings are happening in-between Penney's, Ladbrokes, Boohoo and the local chipper transactions.

With Person 1 and 2, savings is thought of when they get paid, it's first and foremost top of mind; Person 3 is saving but it looks like an after thought.

CBear1993 wrote: »

Am I correct in saying there are different types of savings accounts offered by your bank? i.e. one that you have to request to withdraw from?

There are many types of savings accounts, some offer instant-access savings (like that AIB account you mention), some require 30-60 days notice that you want the money, you'll need to chat with the bank / look on bonkers.ie to see which accounts are best for you.

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Just to note to my previous post around instant access savings accounts, sure there can be a scenario where someone may get phone and transfer money from your instant savings to your current account and then rob it. Nothing is 100% fool proof but it's all about having enough safety layers on your money, you've worked hard for it, so don't make it easy

Markitron wrote: »

I have a savings account with AIB that requires 7 days notice, which is just right IMO. In case of an emergency you are not waiting too long, but its long enough that you won't dip into to it for an impulse purchase.

Sounds good. With this stuff there's no right or wrong answer by the way. everyone is different with this stuff and it's only through listening to others experiences and researching what's best for you do you get the best for you.

For me the best thing I learned when saving for a deposit (is knowing how much a month I could realistic live off). so when pay day came, I transferred out a regular amount to a savings account and not touch, kept my living money in my current account, and transferred the rest into another savings account/credit union so that it was there if I needed it but if I didn't it was saved and whilst it wasn't regular (i.e. sometimes needed to dip into it), it was a fund big enough to say pay for furniture or some appliances.

Doing this when I got paid meant I wasn't getting to the end of the month wondering where my full salary had vanished.

wassie wrote: »

Look at it from the point of view of the person assessing your application.

• If you have a dedicated savings account that shows regular monthly deposits and no withdrawls then you have clearly demonstrated your ability to repay a loan.
• If its in a current account intermixed with numerous transactions, it becomes harder to determine if you have not been 'dipping' into your savings which may negatively impact your application.

This is what lenders prefer and if you want their money then the easier you make it for them, the stronger your application becomes and may also mean a faster approval.

Oh I understand that saving account part it makes perfect sense but the blanket statement of its not a good idea to have that much cash in your current account at any time is what I don't get,

Fair point. I would agree with @Bubbaclaus post on the previous page.

Bubbaclaus wrote: »

Current account could get cleared out pretty easily if you got scammed or fraud occurred. Couldn't happen to a savings account given the funds normally cant be transferred externally from a savings account. I normally keep no more than 100 or so in the current account for that reason. Everything else is kept secure.

And this.

Creamy Goodness wrote: »

from a safety and security point of view, having a huge balance in your current account that's tied to your debit card is a risk. All it would take is for someone to clone your card, or grab your card at knifepoint etc and empty your account. Now you'll get this money back but will take time and I'd rather give them 200-300 euro rather than my lovely deposit for my house.

As long as you have done the right things you money will generally be returned if you are subject to fraud. Its more about minimizing what the fraudsters can get and inconvenience of time & hassle to get your money back.

DubLad69 wrote: »

I was advised by a brooker that if I apply for AIP now when exemptions are not avaliable then it would complicate matters when I am applying for an exemption.

The same might apply to your case?

Are exemptions not available at the moment?

Well poop! Maybe should pull back broker application then

I wonder do the majority of Irish people have there saving accounts with the same banks as the current accounts,
Or do the majority people look around for the best saving accounts ,

SteelyDanJalapeno wrote: »

Afaik there's little to no monetary benefit in most savings accounts these days.

Probably the best incentive out there is BOI who offer 2k I think if you save your deposit with them, and if you draw down with them.

Yup and in fact, savings accounts in Ireland actually cost you money. any interest you gain is wiped out by DIRT and inflation rising. They are secure way of saving for a house, but if you want to actually grow your money they're useless.

the best savings account was the KBC when I joined it 4 years ago, they gave 2.5% up to 40k savings, they've slashed it back down to 0.75% over the last couple of years.

Ikozma wrote: »

If my wife's wages are being subsidised by the government would that effect us getting a mortgage

Depends on whether she is on TWSS or the new EWSS. You wont be able to tell on a payslip whether someone is on EWSS or not.

greengrass88 wrote: »

Unfortunately I heard first hand from various banks and a broker just today, that anyone on the twss or the upcoming ewss will be unable to drawdown until they have a payslip showing their employer is paying wages in full. As for the ewss and payslips...supposedly companies in receipt of it will be published and it will appear on payslips. So I'm told.

I cant see how somebody will be able to tell how someone is on EWSS or not from a payslip. Company publishing probably wont be until next year anyway.

Dubs1990 wrote: »

I was told the opposite from a friend of mine who works for an accountant doing peoples wages this is what I received .

Employers will be required to pay employees in the normal manner i.e. calculating and deducting Income Tax, USC and employee PRSI through payroll.

EWSS is a subsidy paid to an employer. It will not show on payslips or in myAccount. This was only confirmed to them today.

Hopefully for people its not on the wage slip !

Exactly. The EWSS is a subsidy to the employer and set up very differently to the TWSS. Won't be going anywhere near an employee's payslip.

luketitz wrote: »

Best bit of advice I got (from a broker, naturally) when going through our application last year was not to buy life insurance (or mortgage protection) directly from the bank as it's always more expensive. Brokers will always get the better deal for each step of the way if you trust them to.

Good read on it here, it's the kind of thing I'd have never known til I was told!

https://lion.ie/life-insurance/why-buying-life-insurance-from-a-bank-is-always-a-bad-idea/

As with any insurance policy it pays to shop around. Include the lending bank as they may offer a discount - although this generally is more applicable to house & contents policies.

Another tip, especially if you are in a position where you need to drawdown quickly, sometimes also it can be simply easier to go with the banks policy. There is statutory cooling-off period of 30 days on life insurance, so after drawdown you are then free to go and find a cheaper policy, then cancel the bank one.

Just be aware the cooling-off period starts from when the policy begins or when you receive your policy documents, whichever is later to make sure you are inside the 30 day window.

You should get a refund of any premiums you have already paid. However, your insurer may take off a small amount to cover days when the policy was in force but this should be small. They may also charge you a small administration fee.

greengrass88 wrote: »

I hope this is the case as we are unable to buy at the moment as I am on twss....there seems to be a lot of conflicting information out there though. Is it possible that banks will request employers provide letters to confirm if the company is or isnt in receipt of the new ewss?

I suppose aside from this, every bank is also asking you to confirm & state that your employment and/or wages haven't been impacted by covid. In some cases they seek a letter from your employer to state this too, or to state that you're not on the scheme. The subsidy scheme counts as an impact to your wage.

In any case, you have to be honest with the bank's underwriters when they ask this question - if you get found out down the line, it would be very much on you for not being up front.

I had to be honest with them when they asked me about it - there's been a temporary company-wide pay-cut for me rather than the subsidy scheme. The bank said they would still give AIP but the condition is that I either get a new salary cert to state my new "temporary" wage or a letter from the employer to state that the wage will be restored on X date.

It's really painful that this has happened for so many people. In our case we won't get to buy now as we needed an LTV exemption and they're gone. That was the big goal for the last few years so I'm gutted.

But underwriting is underwriting and the banks were hauled over the coals for not being incredibly strict with lending risks the last time around. The central bank are very much cracking down on any loan that would be deemed risky.

Graham wrote: »

I'm not sure on what basis the banks could ask an unrelated party (the employers) for details of the company finances.

Unlike TWSS, the EWSS won’t be mentioned on employees payslip but there will be a new PRSI class on the payslip (previously J9). Revenue are to announce the new PRSI class next week.
Banks will lookout for that prsi class on the payslip and they will know if the individual’s company received Covid support.

Bubbaclaus wrote: »

It is going to be the employees normal PRSI class on the payslip. The EWSS has been designed to ensure it wont be noticable on the employees payslip.

Either people have been incredibly misinformed or are just making things up.

Are you sure? It’s just a different prsi rate is to apply so may not be the normal PRSi class.
Revenue say that might not be the case from this video
https://youtu.be/jj7_465771w
Skip to 50:37

Bubbaclaus wrote: »

You can read the Revenue guidance issued today if you dont believe me. PRSI as normal on payslip, refund of the excess employer amount (if any) at point of payment to Revenue.

I listened to the question and answer at 50:37. She says wait for the guidance and doesnt give an answer (presumably because she didnt know). I dont see how that proves your point at all.

Thanks, I wasn't aware there was an update released today. For anyone who’s interested, link below
https://www.revenue.ie/en/corporate/communications/documents/ewss-guidelines.pdf

avm88 wrote: »

Do all banks check the central credit register AND the ICB when you apply for a mortgage?

I think its safe to assume the answer is yes.

Put it another way, if you were going to lend some one several hundred thousands euros, would you check both?