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In the current open market, securing a good mortgage deal with low interest rates often means needing a dauntingly large deposit. Yet with recent research suggesting four out of five Britons would prefer to own their home rather than rent it, it’s clear that the demand for buying is still high. Trying to save for a house deposit is no easy feat but by implementing some of the below top tips, you could be well on your way to owning the house of your dreams.
As soon as you know the exact sum that you’re going to need in order to secure your dream home, it’s time to start making a plan that will help you reach this goal. Take the time to take a look at what you earn and the cost of all of your outgoings in order to find areas that you may be able to cut back on. Regular saving is much more effective and often setting up a standing order can make this achievable. Use a savings calculator or spreadsheet to survey each of your monthly outgoings in order to come up with an achievable saving sum.
Cut out Luxuries
It goes without saying but luxuries are not always attainable when trying to save for a house deposit. So, whether that’s holidays abroad or eating out, you may have to cut back for a while. Review your monthly outgoings and see if there’s any way you can reduce the cost of your luxuries without having to remove them completely, perhaps only eating out once a month or by switching from Sky TV to standard.
Sell Unwanted Goods
There is true value in all of the “stuff” that we accumulate over the years and many of us are terrible culprits when it comes to hoarding everything from clothes to unwanted CD’s and DVDs. Ask yourself this, if you haven’t used it within the last year, do you really need it? By selling unwanted clutter, not only are you likely to make a tidy profit but you’ll have less in the form of belongings to shift when you finally move into your new home.
Choose a Savings Account
Once you know how much you need to save and how you’re going to save the money, it’s time to start thinking about where you’re going to save it. It’s worth considering opening a savings account if you don’t already have one, whether that’s a regular ISA or a Help to Buy if you’re eligible. Make sure that your savings work harder for you by choosing an account with a good interest rate, by shopping around, you’re able to find the banks or buildings societies with the best deals for new accounts and may even make a couple of extra pounds by doing so!
Buy Part of a Property
If it’s the deposit that’s holding you back from purchasing the home of your dreams, then you should consider shared ownership. Shared ownership is a specific scheme put in place to help buyers who may struggle to purchase on the open market buy a portion of a home, with the rest being owned by the housing association. It’s designed to be flexible, with its most appealing benefit being that it means deposits are substantially lower than that of a traditional mortgage. In theory, this means that buyers could need as little as a 5% of 25% deposit, reducing the strain of saving for a hefty lump sum. Putting this theory into practise, let’s say you are looking at one of the many shared ownership homes in Hampshire for sale, and are considering purchasing. If the original price of the home is £300,000, through a shared ownership scheme you could purchase as little as 25% at £75,000*, requiring a 5% deposit of just £3,6750*.
If you’re working hard and saving as regularly as possible, you’re halfway through the battle. By making some small yet manageable changes, you’ll sure to be on the property ladder in no time.