The upside to saving is not only will you have a sizeable deposit when you come to buying your home, you will also be able to demonstrate to lenders that you are able to budget and save and are therefore more likely to meet your monthly mortgage repayments.
While it may feel difficult to save up enough for a deposit, there are various things you can do to ensure you get on the property ladder sooner than you think.
Talk to a mortgage adviser
Whether you have just started saving or are ready to buy your first home, our mortgage advisers can search over 11,000 products from more than 90 lenders to find the right mortgage to suit you and your circumstances.
A mortgage adviser will be able to explain all of the options available to you and will look at your income and outgoings to establish how much you can afford to borrow and how much you need to save.
Budgeting your money and controlling your income against your outgoings can help you keep on top of your finances and discover where you can make cut backs to help save towards your deposit.
It is important with your budget to consider unexpected costs that may occur and be sensible in your estimates. For example, if you’re feeding a family of four, a budget of £150 a month on food is unlikely to be achievable and it would be better to overestimate your food bill, leaving you with some extra food money for the following month.
If you need help managing your finances you can use our budget template.
Making cutbacks doesn’t have to be painful. The easiest way to save is to make sure you’re not overpaying on your gas, electric and various insurances.
Changing your provider and finding the better deals can help you save up to £200* a year towards your deposit and speed up the process of getting on the property ladder. Whilst you might not think you spend a lot on going out, cutting back here and there by reducing the amount of times you eat out will mean you may start to see the saving pile up.
Take advantage of government schemes
The government has introduced a number of different Help to Buy schemes you may be able to take advantage of, all aimed at those struggling to get to where they want to be on the property ladder:
- Help to Buy Equity Loan - If you are a first time buyer and interested in a new build home, the government will lend you up to 20 per cent of the cost of your new build home in which you will only have to find the minimum five per cent cash deposit.
- Help to Buy ISA - If you are a first time buyer the Help to Buy ISA acts as a savings account, with a few added benefits. If you save £200 a month, the government will boost your savings by 25 per cent, topping it up by £50 each month.
For more information on the government’s Help to Buy Schemes read our article Help to Buy Explained.
The bank of Mum and Dad
Borrowing money from your Mum and Dad can be a quick way to help buy your own home years earlier than you would without their help. If your parents are willing to help you financially, just be aware that there’s a set procedure to follow, as this money has to be officially gifted.
About Mortgage Advice Bureau
Mortgage Advice Bureau is the UK’s most recognised mortgage intermediary brand*, winning over 70 national awards for the quality of its advice and service during the last five years.
It has over 1,350 advisers offering expert mortgage and protection advice on a local, regional and national level to consumers, both face to face and over the phone. Mortgage Advice Bureau handles over £14bn of loans annually, and was the first – and is currently the only – mortgage intermediary to have floated on the London Stock Exchange, having joined the Alternative Investment Market (AIM) in November 2014.
*Based on Opinium consumer research, Summer 2019.