Changing Banks - will it affect mortgage application>

hufc2002

I originally posted this in the bank account section but had no replies so thought I would try here instead.

So my wife and I have both banked with Lloyds for years. We have a Joint Platinum Club Lloyd's account which all household bills come out of, I have a free classic account with 2 DDs and wife has a Club Lloyd's account also with 2 DDs.

I was thinking of switching my account to perhaps First Direct or TSB but just wondered if switching as any negative effects. We are looking to move home in the near future so will be applying for a mortgage.

Any advice would be great.

Thanks

kingstreet

Possibly.

A credit search close to a mortgage application may tip a poor application from pass to fail; or increase the documentary requirements as it lowers the lender's credit score calculated from your application and credit file data.

Then again, it might make no difference at all.

mparter

The general recommendation is to not apply for any new credit (incl a bank account) between application and completion. And to not miss any payments either.

If it was me, I'd leave it until after you've moved in.

hufc2002

One of the reasons I wanted to switch was the reduction in interest rate (halved) on the Club Lloyds accounts (Wife's and Joint) and also the associated Club Lloyds Monthly Saver's have now also reverted to easy saver accounts earning next to nothing in interest.

We have £11.5k in savings and will be saving at least £550 per month.

Any advice?

AnotherJoe

You are talking about maybe a hundred quid or so in interest difference your switch may make? Balance against making a mortgage application with the background of (a) unbroken multiple years good record with your bank, or (b) two months with bank.

As said that may make no difference at all, or it could be crucial. Nothing to stop you opening up another account for regular savings but [STRIKE]I'd have thought putting regular savings in a LISA would be the way to go anyway ?[/STRIKE] (oops missed it wasn't a first house)

David_White

It's unlikely to be a deal breaker however I agree with the above, why take the risk?

One thing that could be an issue is when the bank inevitably make a balls up of the switch and your direct debits go missing

shortcrust

Yep, why take the risk for the sake of a few quid a month. My credit history was a picture of stability and moderation for six months before I even started looking at houses.

hufc2002

Thanks for the replies, I will hold of switching.

Any recommendations of where to save the money? As stated previously we currently have £11.5k split between 2 Club Lloyds accounts (£5k in each) and the remainder in a Lloyds Easy Saver at 0.1%