Making the decision to become a homeowner is a huge and exciting step. But it can also be a bit daunting, especially when it comes to saving up for your first mortgage deposit.
First time buyers often fight themselves on a tight budget when securing their first mortgage, resulting in seeking professional advice on money and finance management. Individuals with past debt problems may find it particularly hard to secure mortgages after an IVA or other debt management plan.
However, following the tips below will put anyone on the right path to securing their first mortgage.
1. Start by creating a budget and sticking to it.
This is the most important step in saving for anything, but especially your mortgage. Figure out what you can afford to spend each month and make sure that your savings goals are included in this budget. If you don’t stick to a budget, you’re likely to overspend and end up with nothing saved.
2. Create a timeline for your goal.
Knowing when you want to have your mortgage saved for can be a huge motivator. It can help keep you on track when it feels like you’re not making much progress. If you don’t have a specific timeline in mind, start with a goal of five years.
3. Cut down on unnecessary expenses.
Do you really need that daily Starbucks latte? Or those expensive dinners out? Chances are, you can do without them and save a ton of money each month. Take a look at your budget and see where you can cut back on unnecessary expenses.
4. Try to increase your income.
If you can find a way to bring in more money each month, you will be able to save even more for your home deposit. Consider taking on extra hours at work or finding a side hustle that can generate some extra cash.
5. Make regular deposits into your savings account.
One of the best ways to save for anything is to make regular deposits into your savings account. This will help you avoid dipping into your savings when you need money for other things. Try to make a deposit each week or each month, depending on how much you can afford.
6. Consider a high-yield savings account.
When you’re trying to save for something as big as a mortgage, it’s important to find a savings account that offers a high yield. This will help your money grow at a faster rate, which will result in more money saved in the long run.
7. Make a lump sum deposit.
If you can, try to make a lump sum deposit into your savings account. This will help you reach your goal faster. One way to do this is to sell some of your belongings or use a tax refund to make a big deposit.
8. Set up a budget for your mortgage.
Once you have your mortgage, you will need to create a budget for it. This means figuring out how much you can afford to spend each month on your mortgage payments. Make sure that your budget allows for room savings so you can continue to save for your down payment.
9. Automate your savings.
One of the best ways to make sure you’re saving for your mortgage is to automate your savings. This means that a set amount of money will be transferred from your checking account to your savings account each month, without you having to do anything.
10. Stay motivated.
Saving for anything can be tough, but it’s important to stay motivated. Find a way to keep yourself accountable and make sure to celebrate each milestone along the way. This will help you stay on track and reach your goal.
Congratulations on your decision to buy a home! You’re taking an important step in the life of you and your family. As you work towards saving for that down payment, remember to follow these simple steps: first, create a timeline for yourself and make sure you know what milestones you need to hit along the way; secondly, set up a budget and be diligent about sticking to it.
Doing all of these things will help ensure that by the time you’re ready to purchase your dream home, you have the funds saved up and ready to go.