Most first-time buyers are expected to put down a deposit of 20% of the price of the property they require. To find average housing prices at their current level equivalent to £44,000, it is hard to say.
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That is why Mammy and Daddy Bank is more important for many people, since parents help with the deposit or act as guarantors of the mortgage payments. To calculate the amount of deposit you want, find the price of a house that you can afford that is realistic for the area in which you live and your type of home. Then, investigate the type of mortgage you can get for a value loan (LTV), the percentage you need to borrow from the price of the requested property.
If the property you need costs £ 200,000 and you think you can get a 90% LTV mortgage, you must get £ 20,000 for the deposit. There are other options to consider if you think there is no savings on a full deposit. These include help to buy and shared ownership. Therefore, there are still many opportunities to buy a new house with a smaller deposit. However, and the increase in income and the inflation forecast will rise in 2017, it will still be a challenge to save the necessary deposit. Here are 10 main tips you can follow to help you save money for a new property: –
It is not fun, but it is a very useful tool at any time, especially at the beginning of the year and as a starting point to reach the final objective to save the necessary funds for a new housing deposit. Establishing a budget implies calculating the total income of your home and applying it to your required bills. Calculate what you have left for discretionary and savings expenses. A new home requires a focus and sacrifice to save a deposit and, therefore, within your budget, identify the costs you can cancel. See where you can cut and if you have permanent orders and direct debits that you no longer use and cancel.
Pay the costs again by deciding what you cannot do without difficulty and what you can sacrifice for a year or so. Check if you can change and save on insurance policies, gas and electricity deals, and broadband and telephone costs. However, make sure your budget is realistic. Saving a deposit takes a long time, so you can’t reduce everything and you could get a monthly reward for meeting your budget.
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2) Check your market
The information is king and when you try to save a deposit for a deposit, you must find out the expected cost of your new home in the area where you want to live. You saved your deposit. If the price of the home is £ 200,000, add 5% per year, which means that if it takes three years, you can expect the price to rise to around £ 230,000. This means that a 15% deposit is now £ 34,500 instead of £ 30,000. Of course, prices could increase faster than this, but they could fall less or even fall, which means that you can reach your deposit target faster than expected. It must include other expenses, such as mortgage fees, transportation costs, survey fees, property registration fees and stamp fees and other movement costs. So research them and add them to the savings goal.
When you have calculated the amount of deposit you want, plan how you will achieve your goal. Calculate your household income and essential expenses on mortgage / rent, utility bills, food, gasoline and travel expenses, etc. And compare income and expenses. We hope the money stays out. Calculate the amount you can save monthly. Then calculate how much you need for the deposit and when you need it. If you need £ 20,000 over a period of three years, you will have to save £ 556 per month. If, for example, you can save only £ 300 per month, then you will have to adjust your time to plan the purchase in five years.
4) Choose a savings account
Protection against deposits if you want to save for a long period, more than two years, you can consider opening a savings bond that will pay a higher interest rate on your savings in exchange for immediate access to the funds. This can be a good thing, although you will not be able to access the savings that would prevent you from spending it and your fund will decrease. If you think you may need access to the emergency fund, there are savings accounts that allow one or two withdrawals each year without penalty or loss of interest.
In general, the longer you connect your funds, the higher the interest rate you will receive. Then, a five-year savings bond pays a higher interest rate than one to three years. Use a comparison website to find the best savings options. Remember that comparison sites do not give you the same result, so check two or three before making a decision.
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More about saving accounts
Set up a regular monthly payment from a checking account to automatically transfer a regular monthly amount to your savings account. Check your savings account every year to verify the interest you are receiving. Savings rates are very low at this time and many of the best rates are mainly made up of bonds that end after one year, so check your savings offer every year and switch to a better market if you can. When saving in cash you can earn tax-free interest. The allowance you can submit annually is currently £ 15,240 and this is reviewed at the beginning of each financial year each April. In April 2017, Life ISA will be launched to give a similar format, so any of the options may be perfect for first-time buyers.
5) Stop renting
The cost of rent is often higher than the cost of a mortgage, so it is very difficult to reserve money. It is a difficult decision, but if you want to get your own property, you may have to decide if you can live without your own space for some time and consider other options. These include returning home to live with their parents or moving with friends. This can be a great sacrifice, but if you put the money you save into your savings, you will reach your goal much faster. Alternatively, you could try to get a cheaper room if it is not an option to return with your parents.
6) Find a guest
If you have space, this can be a very good way to increase your income and allocate money to your savings. You should verify with the landlord that you are happy that you rent a room. They may request a higher rent due to the additional tenant, but you still need to save money and benefit from the savings by dividing household bills. You can advertise a room or ask your friends, colleagues or family to move.
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