by Top Tips for First-Time Buyers
Saving for a deposit is one of the biggest hurdles for first-time buyers, and with property prices steadily rising, it’s more important than ever to have a solid savings plan in place. No matter how much you are trying to save, the following mortgage advice for first time buyers has you covered with some handy saving tips.
Set Clear Savings Goals
The first step to saving for a deposit is to set clear, realistic goals. Determine the amount you need based on the property prices in your desired area. For instance, if you’re aiming to buy a £300,000 home, you’ll need at least £15,000 for a 5% deposit. However, aiming for a higher deposit, such as 10% or 15%, could help you secure a better mortgage rate. So, think carefully about how much you are able and want to save. Once you have a target amount, break it down into monthly savings goals. This approach will make the task feel more manageable and help you stay on track.
Create a Budget and Stick to It
Budgeting is the backbone of any savings plan. Start by taking a close look at your income and expenses. Identify areas where you can cut back, such as dining out, entertainment, or that gym membership that you never make use of. You can then put these savings directly into your deposit fund. Using budgeting apps can help you monitor your spending and stay disciplined, and are easy to access at any time. Setting up a direct debit to a separate savings account each month can also ensure that your deposit fund grows without you needing to remember to do anything!
Explore Investment Options
If you have a longer timeframe to save, investing could be a smart way to grow your deposit fund. Stocks and shares ISAs allow you to invest in the stock market, with any returns being tax-free. While investing carries risks, it can potentially offer higher returns than traditional savings accounts, especially if you start early. It’s wise to consult with a financial advisor before making any big investment decisions though, especially if you’re new to it. They can help you decide how much risk you are willing to take and guide you through the most suitable investment options.
The Importance of Finding a Great Mortgage
While saving for a deposit is crucial, securing a mortgage that suits you is equally important. Using a mortgage broker can be highly beneficial for first-time buyers. Brokers have access to a wide range of mortgage products, saving you from having to go back and forth. They can also offer expert advice that is tailored to your circumstances, helping you find a mortgage with great rates and terms that suit you. They can assist you in navigating the application process as well, increasing your chances of approval.
Be Patient!
Saving for a deposit can be a long and sometimes challenging journey, but it’s important to remember that every pound you save brings you closer to your goal of owning your own home. So why not start putting a saving strategy together today?
