Purchasing a property is the most expensive purchase you will undoubtedly have in your lifetime. With most lenders requiring a minimum deposit for your first home, it can seem like owning your own home is way out of your reach, however with the help from a mortgage broker and our handy tips, you can aim to have your deposit within 12 months ready to purchase your first home.
1. Budget, budget, budget.
We can’t stress this point enough. Take the time to sit down and work out how much money you take home each pay and itemise your outgoings for each month including insurance, mobile phone bills, weekly lunches, food and anything you have to pay out on a regular basis. This will help determine how much surplus cash you have at the end of each month. You should be able to work out a figure that you can comfortably put aside each month into a high yield savings account. If you stick to this, you will be in your first home before you know it.
2. Pay off your other large debts first.
Juggling several repayments can be tough, so if you can pay for things outright before you start saving for your deposit, we advise you to do this. Items like credit cards, which you pay high interest on need to be reviewed as to whether they are necessary or not. We recommend speaking to your mortgage broker about whether you should pay off loans such as car loans or put that money towards saving for your first deposit.
3. Set up a savings account with high interest.
When saving up for your deposit, open up a new savings account that is for your deposit only. We advise one that rewards you with a high interest rate, but penalises you for withdrawing money. That way you’ll be motivated not to touch the money you’ve worked hard to save until you reach your goal.
4. Make a few sacrifices
Is there any better feeling than owning your own home and moving out of your parents’ house? We all want that freedom eventually, but it doesn’t come easy. You are going to have to make a few sacrifices along the way. Want to catch the latest movie with your friends? Why not host a movie night at home instead? Feeling like a few cocktails? Host a cocktail night at home with friends and save yourself cash. These minor changes will make a huge difference on the time you spend saving for your home deposit.
So, fast forward 12 months and after following our tips and advice, you should be in a better position to speak to your mortgage broker about taking out a home loan and knowing that all that hard work was worth it once you pick up the keys to your own home.
If you or someone you know would like some advice on saving for their home deposit, get in touch today and one of our friendly brokers will catch up over a coffee to offer some advice.