It’s no secret that in today’s market, saving a deposit for your dream home can be a real challenge. If you want to secure a mortgage you will need to save at least a 5% deposit, but even this can be a huge sum. As daunting as the prospect of saving thousands of pounds can be, here are 6 tips to help you make the most of your deposit.
Help to Buy Schemes
There are plenty of Help to Buy schemes on offer, so make sure you look into them as there may be one which is ideal for your situation and they can make a huge difference to the total sum you need to save. One example is a Help to Buy loan where you can apply for a loan of up to 20% of the property value, if you are buying a New Build. You don’t have to be a first time buyer but you will still need to save a 5% deposit to use this scheme. Help to Buy mortgages are also a great scheme to look into. When saving your deposit, knowledge is key.
Team Up!
If you have a friend, partner of family member you would consider living with, then why not? Having two people buying a home together will instantly half the money you need to save for a deposit and make saving a much quicker process. Ensure you discuss what would happen if one of you wants to sell your share and once this is clear you can start saving.
Check Out Different Locations
There is always compromise when buying a property, normally on one of three things; Size, Location, or Budget. It might be that you can find a cheaper property in a different area which isn’t too far from your dream location. This will mean you can buy it sooner with the deposit you have already saved, or save a bit longer for a better mortgage deal.
Shared Ownership
Also known as ‘Part buy, Part rent’ this scheme will bring down the size of the deposit you will need and you are buying a share of the property and paying rent on the rest. There is often the opportunity to build up and buy the whole property so you can reach get full ownership over time. It is likely you will need to register with a housing association to offer on a shared ownership property but is definitely worthwhile with the potential savings on your deposit.
Save Effectively
Do your research! When you first start saving for your deposit, it is more than likely (and a very smart idea) that you will open up a new bank account. Every bank will claim they have the best offer for you, and there’s a lot of competition. If you are saving in a Help to Buy ISA and reach the maximum amount, or if you are just saving in a current account, get the best deal for the rest of your savings. It’s possible to get as much as 5% interest on your savings so find the most competitive rate for you, and look closely at the T & C’s.
Remember ALL Costs
Having taken steps to boost your deposit, don’t stop saving. There is a huge amount of costs involved when buying a property such as mortgage fees, Stamp Duty even down to Removal Costs and the maintenance of your new home. It is important to work out what these extra costs might be and factor them into your savings. You can never have too much money saved so give yourself time to save as much you can and make sure you are in a comfortable position before you make any offers.
Saving a deposit can be daunting, but it’s achievable if you take the right steps. So… Keep Calm and Carry On Saving.