If you want to get on the property ladder and you’re asking how to save for a house deposit it’s vital you have a plan on how to do it. So this article explains everything you need to know to put you in the best position of saving your first time buyer deposit.
Slash your spending
When it comes to buying your first home you’ll want to put every penny you can towards your first-time buyer deposit. So sit down and go through your finances in detail and look at where you can slash your spending. There are lots of ways you may be able to trim costs. And even if the savings seem small, remember it all adds up. For example, can you:
- Sort your social life: If you find you splurge on nights out, next time you’re meeting up with friends think about how you can cut costs. Could you look for deals on at local restaurants or suggest going to each other’s houses for drinks instead of the pub?
- Cut your food spend: By making a meal plan for each week and including cheap recipes to keep the overall costs down it could make a big difference. And make sure you buy food so you can take your own lunches into work too.
- Can you live rent-free? Paying rent is likely to be your largest outoing. Would you be able to move back in with family for a period in order to save money? It won’t be an option for everyone but it could give your savings a big boost if you can, especially if they won’t charge you.
Once you’ve worked out how much you can afford to save each month set up a standing order to put that amount into your savings on payday.
First time buyer deposits: Could you make more cash?
Once you’ve worked out where you can save - another way to give your first time buyer deposit a boost is to increase the amount you earn. So could you take on an extra job in the evenings or weekends?
How to save for a house deposit? Get free money!
Consider opening a Lifetime Isa if you’re eligible. They’re for those aged 18-39 years old and they’re designed for buying a first home or for retirement. You can put in up to £4,000 a year until you’re 50 years old and you’ll get a 25% bonus on your savings of up to £1,000 per year. You’ll need to make sure you read the t&cs to ensure it’s right for your circumstances.
First time buyer deposits: How much will you need?
You might have seen scary looking newspaper headlines that suggest you’ll need to have an enormous deposit to stand a chance of buying your first home. But when you’re thinking about how to save for a house deposit you’ll be relieved to hear there are lots of options to buy your first home with a small deposit. So read on to find out more about your options - one might be the ideal scheme for you.
Help To Buy Equity Loan Scheme
With this Help to Buy scheme, the government will lend you up to 20% of the cost of your new build home. This rises to up to 40% if the property is in London. And this is the ‘equity loan’. You’ll need to put down at least 5% of the purchase price and you’ll get a Help to Buy mortgage product to cover the rest. Regional price caps apply on the value of property you can buy through the scheme, up to a maximum of £600,000 in London.
* There are different Help to Buy Equity Loan schemes for England, Greater London, Wales and Scotland. This information relates to England and Greater London only.
Shared Ownership
With Shared Ownership, you buy a share of a property of between 10%-75% and you pay rent on the rest. And as you’re buying only a percentage of the property you’ll need a smaller mortgage – and therefore a smaller deposit.
Deposit Unlock
With this new scheme, which has been devised between the housebuilding industry and lenders, you can buy a new build home worth up to £750,000 from participating home builders with a 5% deposit.
95% Mortgages
And find out if you’re able to get a mortgage with a 5% deposit with the government’s mortgage guarantee scheme. It was introduced last year to incentivise lenders to reintroduce 95% mortgage deals. This scheme can be used to buy properties up to £600,00. And it’s available to all homebuyers and on all types of properties.
When you’re doing your research it’s a wise move to get expert advice about first time buyer mortgages. This advice will be tailored to your circumstances so you’ll find out all the options for you.
First time buyer fees
However when you're thinking about how to save for a house deposit it’s important to factor in other things you’ll need to pay for. These include getting a survey, legal fees, stamp duty – depending on the value of the property, and furnishing your home too. So add these costs into your calculations.
First time buyer mortgages? Get advice mortgage advice
When you’re buying your first home there is a lot to think about – so it’s as good idea to get expert mortgage advice. Our team of advisers will guide you through the process and help you find the right mortgage for you. So why not speak to out expert first time buyer mortgage advisers for a no-obligation chat? Call us on 01363 773860 or click here to arrange a call back