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Thursday, 21 November 2019
Agent Resource Center
Agent Resource Center

Five Tips For Saving For A House Deposit

Written by Posted On Friday, 08 November 2019 07:38

For a lot of people, one of the first big steps that they’ll take in their lifetime is buying their first home. However, a home is also one of the most expensive purchases that people will ever make. The deposit for a house is usually about 5% of the property’s total cost, with a lender giving you a mortgage for the rest. To put that in perspective, if your home costs £600,000, then your deposit will be £30,000.

So, just how exactly can you most effectively save for your house deposit? Try following these five actionable tips.

 

Do the Maths

The first thing to do is to take the time to work out exactly how much you want to borrow. For example, do you want to save 5% for a deposit and take a 95% mortgage, or can you stretch to a 10% deposit for a 90% mortgage?

When it comes to things like this, you’ll want to be as accurate as possible, but luckily their tools you can use to help you, such as a mortgage deposit calculator.

You’ll also want to work out things like how long do you want to be paying the mortgage? How much can you afford a month? How long will it take you to get the money you need for that deposit?

 

Decide How to Save

Deciding how you are going to save is a big part of things as you’ll be able to view and access your money on a regular basis.

Are you planning to open up a current and savings account combination where you will be able to access both your personal account and the savings at the same time? Are you going to open a completely new account where your partner or new housemates can also access and add to the funds? Are you going to withdraw the cash and store it somewhere safe?

 

Create A Budget

Budgeting is vital when saving for any goal but especially so when it comes to something as important as a house deposit. There are a lot of good budget templates out there that can help you map out your income, and your monthly spend so you can see what excess is left each month is or where you can make cuts as necessary.

This will also allow you to track each month how much you have saved and see where you are falling behind or if you are ahead of schedule.

 

Share the Cost

Are you planning to share this new home with someone? Perhaps a friend? Family member? A partner? Often the case will be that you are moving into a new home with a husband or wife, perhaps an, in that case, it is natural to assume that, if the house is going to be in both of your names, that you will both be saving towards a deposit.

Make sure you are both agreed on how is most effective to share the saving responsibilities, and that you can both access the money fairly.

 

Can the Government Help?

In the UK there is a Government scheme called the Help to Buy ISA where certain people are eligible for help from the government to buy their home. This applies mostly to new homeowners who are looking to buy newly built homes with a price of up to £600,000.

It is important to note that this scheme is only available in England. However, Scotland, Wales and Northern Ireland do run similar schemes, so it would be worthwhile checking to see if you are eligible for this government scheme to receive extra help.

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Chris Smith

I'm Chris and I have been in the business of passing on advice to first time buyers, general buyers and those buying to let for a few years now. My time working as a mortgage advisor, and my business background give me the knowledge and the insight to make sure that you don't make any mistakes in your purchase. Not everyone gets the advice that they need when buying a property, a lot of agents just want the sale. As I'm not here to sell, you know that my advice is genuine and that it can help you on your endeavour.

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