There are many ways you can start saving for a new property, here are a few tips to help get you started.
Work Out A Date
To be able to start saving you need to have a clear target in place, this will give you motivation as you’ll have something to work towards. It wouldn’t feel like an endless goal.
It will also help you set a clear budgeting plan and be stricter in sticking to it.
Finding A Better Savings Account
A regular savings account is a good base to start with, these accounts usually make you put a certain amount of money into your account each month.
However, if you want a more flexible account, consider an easy access savings account. This will allow you to put in or withdrawal out money whenever you want. These accounts tend to have less of an interest rate than a regular savings account, but a regular account won’t allow you to withdrawal money immediately, you’ll have to wait a few days.
Each bank will have different deals, doing research on them and getting quotes would be a good idea.
Do some research on how much property costs are around the area you want to move to. Although, buying a house or flat isn't just about the deposit. You'll need to think about various other costs like, legal fees, survey fees and any upfront mortgage fees.
If you see a mortgage advisor, they’ll be able to weigh up your financial situation and tell you exactly what you can afford.
This will give you a better idea on a budget goal and a realistic overview on what you can achieve, making saving a lot easier.
Sit down and go through all your in and outgoings, this will give you a better idea of what your daily situation is. What can you cut out? Think about eliminating luxury items that are just a bit unnecessary like, buying non branded items or cancelling subscriptions.
Once your outgoings are more concise, you can create a monthly plan. Split your bills and other automated outgoings, with your daily spending on food, travel etc. Not only will this help you gain some perspective, but it’ll make you think; maybe I could use coupons, point cards, start cycling rather than spending money on petrol.
Good Credit Score
To be eligible for a mortgage you’ll need good credit, they want to know they can trust you in repaying loans. This means, the first thing to do is to clear off any outstanding debts, you can’t save up money if you still need to pay for certain things. This also means you can’t be late on repayments, not only will your interest on the debt go up but you’ll show you can’t handle your finances.
Also, your credit utilisation ratio is just as significant. Just because they give a certain amount of credit, doesn’t mean you need to spend it all. Not only will it make lenders think you have too much debt to handle, the moment you start spending more and more on your credit the more the minimum required payment each month will go up. This is not what you want when saving for a house.
Buying a house can be daunting however, with these few tips and a little bit of guidance, you’ll be able to save for a place in no time.
Looking for a property in the area? Take a look at our current listings here.