If you want to get on the property ladder, then it can be a long journey to get there. One of the most frustrating things is that often your mortgage repayments will be less than what you are paying in rent now! But unless you have enough for a deposit, and can approved for a loan, then being loaned money is just not going to be happening.
Why is becoming a homeowner so important anyway? For many, not all, they will see a cheaper cost of living than if they were renting. And for a lot of people, it is knowing that you have money going into a physical asset that it yours, and you can sell it if you needed to. That asset and money can be used towards a larger home or help you to have money for retirement if you downsize, for example. As has been said, the cost of paying your mortgage each month can often be lower than what you pay to rent somewhere of a similar size, depending on the size of the property and how much deposit you have. But using a house loan calculator can be a good way to check if that would be the case for you. The worst part about renting is knowing that it can just be money wasted. You can going to pay someone else’s mortgage each month, rather than your own.
So if you want to own a property sooner rather than later, here are some of the best ways that you can save for a mortgage. Some of them may require living less than ideally for a certain amount of time. But a little sacrifice can be totally worth it if you want to get money for a deposit soon.
When you rent a home, it can be just drain you of money, leaving you with very little for a deposit. But here are some of the ways that you can stop renting, or paying as much rent. Done for a period of about a year, could give you just what you need for a deposit.
If you live near to your childhood home, then it could be worth moving back home with parents for a short amount of time. Of course, that isn’t going to always be ideal. But if you can live rent-free, or just covering your expenses in an effort to save, it can make the inconvenience worth it. Often parents or family members want to help their children to get on the property ladder, but they don’t always just have a chunk of money to give. Which is why having you back home with them can be a way for them to help.
If you are renting a place out by yourself, then it can be costing you way more than it should be. You could rent a room in a house with other people, and cut your costs down massively. Again, it isn’t always going to be ideal. But it can help you to save what you normally would have been spending on rent. So ask around with friends or advertise locally.
If you want to stay where you are, but don’t mind the idea of sharing, then a getting a lodger can be a good idea. Check with your landlord first, before advertising it yourself, to check that it is allowed. If they’re keen to hear you want to share, then you never know, they could lower your rent and help you find someone to share with.
Get Help With Your Deposit
There are some schemes that can help you to get money for your deposit. Depending on where you live, there are some ‘help to buy’ schemes where the government offer a certain percentage of money to help you save and put towards your deposit. But that can be difficult, as it isn’t available everywhere and there will be certain criteria you need to meet.
Speaking to parents or grandparents for help can be a good idea if they are able to loan you a certain amount, then it can mean that you have enough for a deposit sooner rather than later. Just be clear on the terms you have with them and when they expect to see the money back, if at all.
If you have someone that wouldn’t mind being a guarantor for you, then you could get on the housing ladder sooner too. This means that you don’t need to have too much of a deposit; you just need someone who will be willing to pay the money to the bank if you miss a monthly payment. If you’re employed, then it shouldn’t be an issue making the monthly repayment; the only issue is getting a deposit. A guarantor should be someone that you trust, as well as someone that trusts you.
However you choose to live as you’re saving for a mortgage, make sure that you’re setting yourself a budget and sticking to it. In order to save the maximum amount of money each month, then having a budget to stick to is really important. Work out what your exact incomings are from salary and anything else, and then calculate exactly what you spend each month on bills and things like groceries. From there, you’ll know what you have left and can figure out how much to save. It could be that you cut down your social expenses or your grocery bill for a couple of months, as well as cut out luxuries like vacations. Whatever you choose to do, just makes sure that you at least saving something each month.
Make Savings Earn More
One of the final things that you can do is to make your savings work harder for you too. When you are putting money aside each month from your budget, is it in an ISA or high-interest bank account? If not, you’re missing out on basically some free money for just having your money sit there. So if you’re not making your savings work harder for you, then you should be.
Image by pxhere.com