3 Tips For Saving For Your Mortgage Deposit

Although some might say that renting is their preferred choice, renting a house isn’t always the cheapest option – in fact, it can often be a lot more expensive than having a mortgage. The stumbling block comes in the form of the large deposit – usually around ten percent of the property’s value – buyers need before a mortgage lender will consider them. With that in mind, and with the deposit being the one element of buying a house that many people struggle with, here are some ways you can save up that ten percent a little more easily than you might have thought. 

Monthly Standing Order

When you know you want to buy a house, the first thing to do is to speak to a mortgage provider. When you do this, you’ll find out how much you can borrow on your current salary, and that means you will know how much you need to save up for a deposit. The figure might seem huge to start with, but don’t worry; if you break it down into more manageable sums, it all becomes a lot easier. 

 

Work out how much you need to put aside per month so be able to save up the deposit in the time frame you have given yourself, be it a year, five years, or perhaps longer. If the figure you are left with isn’t enough to live on, then you’ll need to save for longer so that you don’t get into any financial difficulties. Then set up a standing order for that amount. If the money is moved automatically, ideally on the same day you’re paid, then you won’t miss it, and as you see it building up in your savings account, you’ll be pleased with the progress you’re making. 

 

Pay Less Rent 

Initially, the idea of paying less rent might seem like a strange thing to do – after all, your landlord isn’t going to be too happy with you if you start giving them less money each month. But what we mean by paying less rent is that if you want to buy a property, you might have to move out of the current rental property you’re living in, and either move back in with your parents or find a cheaper place to rent. When you do this, you will be saving money on your monthly outgoings, and you can use that saved money (along with anything else you can afford to put to one side) to save up for your deposit. 

 

Remember, you’re going to have to move anyway when you finally buy the house of your dreams, so you shouldn’t be too attached to your rental property. Moving isn’t going to be too much of a hardship, and when you think of the reason and the ultimate goal you have, you’ll know it’s worth it. 

 

Look For Government Schemes 

The government has considered how hard it is for people to get on the property ladder, and of course, it’s in their best interests for there to be more homeowners than renters (think of the stamp duty tax, for example). With this in mind, they have come up with a variety of different schemes to help people; look into these schemes because you might find that you don’t need quite as high a deposit as you thought, allowing you to buy a property a lot sooner than you anticipated. 

 *Photo source Kindel Media from Pexels

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