You need a mortgage deposit. Here’s how to save for it
It’s an exciting time in your life, but it’s more than a little daunting to look at the numbers adding up before you. Buying a house is an important moment for any adult and it’s one that they can achieve sooner than they may first think if they act sensibly and in a focused manner when it comes to savings.
Today we’re going to run you through a set of simple, effective and practical tips on how to get your savings to a level sufficient for a mortgage deposit. Let’s take a look.
Consider ways to pause renting
It’s often the case that first-time buyers turn to family and friends for support when they’re preparing to get their first house, and it doesn’t always have to be by simply asking them for money. For most adults, rent is their largest expense in life, making it a great point to consider when you’re planning condensed saving for a period preceding the buying of your first home.
By moving in with family or friends for a period can drastically boost your savings power. Many parents will be happy to consider this on the understanding that it will boost the pace at which their child can move into a home and get on the property ladder.
If you’re going to consider this point, it’s ideal to have your research and planning done in great detail before you propose the idea. Be ready to demonstrate how much you have, how much you need and provide a forecast and prediction of how long you’ll need to live with them before you’re ready. The more information you bring to the table in advance, the better.
Reduce your rent
If you can’t eliminate your rent entirely, it’s also sensible to look at minimizing it instead. Cutting even two hundred Pounds off your monthly outgoings can add up to a significant amount over the course of a year, helping to push you closer to that special date of applying for your first mortgage.
Generally speaking, you can do this in two ways. The first is to look for a smaller and more affordable place to live for a period prior to your mortgage and ideal move-date. If you can relocate to a cheaper area and a smaller place and put up with that for, let’s say, a year, you’ll be in better financial shape.
Your other option is to look for a lodger to live with you if you have space in your current property. If your landlord is happy for you to sub-let one of the rooms in your house or flat, you can get a sizeable reduction on your monthly outgoings that can go right into your savings.
Prepare funding options
It’s not uncommon for the house buying process to involve hidden and unexpected expenses. For new buyers who are running things closer to the wire than a person or couple already on the ladder, these can sink your plans in a moment – far from pleasant.
Because of this, it’s good to have emergency funding options and contingencies planned in place. This can usually be arranged through family and friends; parents may be willing to offer you a loan on the understanding that, once you are moved in and your expenses stabilise, you’ll be able to repay within a reasonable period. For smaller expenses common throughout the buying and searching process, you may be able to similarly ask friends and family for help. If that isn’t possible, seeking extra capital from banks or, if you have credit issues, by taking an unsecured loan with bad credit.
It’s exciting, it’s nerve-wracking and it’s a process to get through before you can start the next chapter of your life. We wish you all the best of luck in your planning in the months ahead and we hope you find your dream home to move into soon!