The upside to saving is not only will you have a sizeable deposit when you come to buying your house, you will also be able to demonstrate to lenders that you are able to budget and save and are therefore more likely to meet your monthly mortgage repayments. While it may feel impossible to save up enough for a deposit, there are various things you can do to ensure you get on the property ladder sooner than you think.
Talk to a mortgage adviser
Whether you have just started saving or are ready to buy your first home, our mortgage advisers can search over 11,000 products from more than 90 lenders to find the right mortgage to suit you and your circumstances. A mortgage adviser will be able to explain all of the options available to you and will look at your income and outgoings to establish how much you can afford to borrow and how much you need to save.
Budgeting your money and controlling your income against your outgoings can help you keep on top of your finances and discover where you can make cut backs to help save towards your deposit.
It is important with your budget to consider unexpected costs that may occur and be sensible in your estimates. For example, if you’re feeding a family of four, a budget of £150 a month on food is unlikely to be achievable and it would be better to overestimate your food bill, leaving you with some extra food money for the following month.
Making cutbacks doesn’t have to be painful. The easiest way to save is to make sure you’re not overpaying on your gas, electric and various insurances.
Changing your provider and finding the better deals can help you save up to £200* a year towards your deposit and speed up the process of getting on the property ladder. Whilst you might not think you spend a lot on going out, cutting back here and there by reducing the amount of times you eat out, you may start to see the saving pile up.
Take advantage of government schemes
The government has introduced a number of different Help to Buy schemes you may be able to take advantage of, all aimed at those struggling to get to where they want to be on the property ladder:
• Help to Buy Equity Loan - If you are a first time buyer and interested in a new build, the government will lend you up to 20% of the cost of your new build home in which you will only have to find the minimum 5% cash deposit.
• Help to Buy ISA - If you are a first time buyer the Help to Buy ISA acts as a savings account; with a few added benefits. If you save £200 a month, the government will boost your savings by 25%, topping it up by £50 each month.
The bank of Mum and Dad
Borrowing money from your Mum and Dad can be a quick way to help buy your own home years earlier than you would without their help. If your parents are willing to help you financially, just be aware that there’s a set procedure to follow, as this money has to be officially gifted.
*according to Department of Energy and Climate Change Government Statistics
Article credited to mortgageadvicebureau.com