Buying your first home is an exciting moment in your life, but many first-time buyers feel anxious about how much money they need to save to put down a deposit. Saving for your first mortgage isn’t just about affording a deposit. You also need to cover other purchasing costs, such as solicitors fees and survey costs.
The larger the deposit you can put down on your first home, the lower the mortgage repayments will be. So, it pays to save as much as you can towards your first home, and here we present some handy tips to help you save for your deposit and take your first step on the property ladder.
1: Create a realistic budget
Creating and sticking to a budget to help you save is the first and most practical step to saving money for your first home. However, you need to make your budget realistic and easy to stick to because if you make things too challenging, it will be easy to give up.
Work out your monthly income and expenses to find out how much leftover money you have to work with each month. It would help to allocate as much spare cash as you can afford towards your house deposit, but don’t deprive yourself entirely of a bit of spending money. You don’t need to live like a hermit to afford your first home.
2: Add any spare cash to your savings
While you save a regular amount each month towards your house deposit, you should still allow yourself some spending money for the month. Should you get to the end of the month with any spending money left over, you should think about adding it to your savings instead of blowing it on something frivolous.
Even if you have £50, £20 or £10 spare left at the end of the month, adding it to your deposit savings can make a massive difference towards hitting your home-buying goal. Commit to start each month over fresh with your allocated spending money and add anything you have left to your deposit savings account.
3: Use free online mortgage calculators
While saving for your deposit will be your main priority, it can help to set a rough target amount to save. If you are unsure how much money you will need to save to afford a mortgage, use an online mortgage calculator to work this out.
A mortgage calculator will give you an idea of how much deposit to save to make your monthly mortgage payments comfortably affordable. The more deposit you can put down on a property, the lower the mortgage repayments will be.
However, once you have your new home, you will need to be able to afford your mortgage repayments and other outgoings, such as council tax, energy bills, home insurance, food and clothing, car finance and related expenses etc. Bear this in mind when working out how much you need to save for your deposit.
4: Sell anything you don’t need
Use online sites like eBay, Vinted and Music Magpie to sell anything you no longer need. If you have a wardrobe stuffed full of clothes that you haven’t worn for months or jewellery that you have never worn, you can photograph them and sell them to free up some spare cash.
It can help to take an inventory of all your possessions and list everything you cannot live without. Anything that doesn’t make this list could be sold to someone who would love it. There is a big market for used mobile phones, tablets, and other electronic gadgets, too, so look for opportunities to sell anything you don’t need and certainly can do without in your new home.
Deciding to buy your first home is both exciting and daunting. But with these tips, you can save up for your deposit without sacrificing every last penny you earn.
If you are in the market for your first home, our team will be happy to discuss your requirements.
Get in touch here for an informal chat.