Applying for a new bank account during mortgage

jkrbec

Hi all - we’re currently going through the house buying process and have our mortgage offer, my partner wants to open a Monzo account so we can use it as a joint savings, we won’t be changing our main banks accounts, will this impact our application at all? 

aoleks

yes, it impacts your credit score. don't do it, that account can wait, it's opened in no time. few days here and there won't make any difference at all, wait until completion.

propertyhunter

Do savings accounts such as ISAs impact your credit score? I had to open a few instant access savings accounts and an ISA this year to distribute the funds of my house sale, and I haven't yet found a house (living with family) - Experian says my credit score is unaffected - but are there hard searches performed for savings accounts? 

aoleks

you're not opening a savings account, you're opening a current account with Monzo that you intend to use a joint savings account. quite a difference. to the lender, you are opening a new bank account and that's reflected on your credit score. the average age of your bank account is a factor in deciding the score, though lenders don't look at the actual number.

why is this savings account so important now, instead of waiting another 1 day/week/month? it really won't do anything for you, regardless of when you open, so why take a (very low) risk?

jkrbec

aoleks said:

you're not opening a savings account, you're opening a current account with Monzo that you intend to use a joint savings account. quite a difference. to the lender, you are opening a new bank account and that's reflected on your credit score. the average age of your bank account is a factor in deciding the score, though lenders don't look at the actual number.

why is this savings account so important now, instead of waiting another 1 day/week/month? it really won't do anything for you, regardless of when you open, so why take a (very low) risk?

It was someone else who asked about the savings, I know a new monzo account will initiate a credit check but mortgage lenders ignore phone contracts etc so wondered if it was the same with standard current accounts 

amnblog

mortgage lenders ignore phone contracts etc 

Where did you get that idea from?

jkrbec

amnblog said:

mortgage lenders ignore phone contracts etc 

Where did you get that idea from?

Sorry I didn’t mean in general, I meant if you was already approved and changed providers during the process, I’d previously been told this wouldn’t impact an application if affordability didn’t change.

badger09

First of all, forget the idea of a 'credit score'. Every lender will have its own method for calculating your credit worthiness.

A current account offers credit facility, simply because you can become overdrawn, even if you have no overdraft facility. Whether your particular mortgage lender views the addition of one current account, with associated credit facility, is the critical factor. Some will, some won't. But why take that risk?

Open a savings account, joint if you wish. Problem, or potential problem solved.

csgohan4

which is more important, house or new bank account?? No matter how small the risk perhaps, it is still a risk