When you want to get on the property ladder, you want to climb that first important rung, but it can be difficult. House prices are high and the banks are requiring ever-increasing deposits to secure a mortgage, so what can you do to save for your first home and speed up the process of getting on the property ladder so you can stop throwing money away on rent?
Reduce your daily spending
Most of us spend more money than we really need to on a daily basis., We buy the meal deal from the supermarket instead of bringing our own sandwiches, pay for takeout coffee instead of brewing our own, sign up for steaming subscriptions that we rarely ever use, and that’s just the tip of the iceberg!
If you are looking to save for a deposit as quickly as possible, it is, then, important that you do whatever you can to reduce your daily spending and save money. No, buying the odd takeout coffee will not mean the difference between being able to afford your home or not as some individuals think but the less you spend each day, the more you will be able to save the more quickie, and it does eventually add up. Economising now will give you a better financial future later.
Pay down debts
If you want to be in a position to be offered a mortgage, whether it is a regular one or a bad credit mortgage for people with a chequered credit history, one thing that will help you to get accepted sooner, rather than later, is having less debt.
Mortgage lenders will assess your financial circumstances before they make a decision, and if they find that you have too much debt to ensure that your mortgage is affordable for you right now, chances are you will be rejected. That is why, if you have a lot of debts, it can be better to focus on paying them off as soon as possible than it is to focus on building up a deposit. Once your debts are paid off, or at least brought down to a manageable level, you will have more money to start saving for a deposit and once both things have been done, your chances of getting on the property ladder are going to be fast higher.
Streamline your bills
It is also really important that you take the time to streamline your bills right now. Doing so will enable you to save more money towards a deposit more quickly, and make it more likely that you will pass the mortgage lender’s affordability assessment too.
What do I mean by streamline your bills? Basically, do what you can to lower the amount you are spending on utilities and other essentials, such as broadband each month. Often, you can renegotiate bills for things like TV packages and broadband by simply calling up the supplier and talking to them about a reduction in your rate.
Obviously, you can’t really negotiate on bills for things like gas and electricity, but you can switch to a cheaper supplier or monitor your usage so that you spend less overall, and doing so will pay off when it comes to applying for a mortgage because your outgoings will be smaller and smaller and you will have more money left over at the end of each month.
Even if you aren’t getting set to buy your first home, streamlining your bills is a sensible financial step to take.
Consider a side-hustle
Chances are you are already working really quite hard to save as much money as you can towards your first house, but if you want to get there even faster, then taking on a second job, or even better, starting your own side-hustle business is a great way to build your deposit quickly and show the banks that you are a serious person with plenty of money coming in.
You don’t necessarily have to do it forever, but the longer you can work as a freelance graphic designer or dog walker, or whatever, the shorter the amount of time it will be until you are holding the keys to your brand new home.
Download a budgeting app
These days, it has never been easier to budget your money effectively thanks to the abundance of budgeting apps that are readily available, and which can even be connected to your bank account to get an accurate idea of your incomings and outgoings.
It can feel like a drag to live to a budget but if you want to buy your first home faster, budgeting will help you to ensure you are not overspending on unnecessary things, and that you are paying for the essentials. It will also help to streamline your finances in such a way that the banks will love when the time comes to apply for your first-ever mortgage. The more you know, the better you can do.
Move to a cheaper place
If you are struggling to get on the housing ladder because you are already paying a fortune in rent, and it does not leave you with enough cash at the end of the month to put into a savings account for your deposit, then you might need to consider moving.
If you can find a cheaper place to rent, then that would mean you can put a bit more aside each month to speed up the home-buying process. So,e people even mo e in with their parents or take to living in camper vans for a year or so to save up, and although you do not have to go to those extremes if you do not want to, finding cheaper living arrangements now is sensible. Yes, it might not be the comfiest, but it will be worth it when you get the keys to your very own home in as short a time as possible.
Save the smart way
If you are aged between 18 and 39 and you are living in the UK, then you can take advantage of the Lifetime ISA account. If you put all of the money you are saving towards a deposit into this account, then when you withdraw it, which you can only do to buy a house or for your pension when you are older, the government will top-up however much you have saved by 25 percent which means you could be able to afford your new home 25 percent faster than before.
If you are currently saving for a house deposit in any other way, and you are in the right age range, and looking to buy your first home, then transfer your savings to a Lifetime ISA account immediately to reap the benefits and get a nice 25 percent bonus when the time comes to buy.
Buy with someone else
If you are young and you are looking to get that first step on the housing ladder as soon as possible, it might be worth considering the possibility of teaming up with a friend or family member who is also looking to buy a property, so you can split the costs and save up that deposit twice as fast.
If you buy with someone else, then chances are you will have to live with them for a while which might not be ideal, but bear in mind that once you’re on the ladder, it’s a lot easier to buy the next property and the next, and that you will be able to sell up eventually, and it does not look like such a bad way to buy your first home after all.
Just make sure that the person you buy with is someone who you get as long with well, can live with for a period of time, and who is trustworthy, although, of course, you will need to have official legal paperwork drawn up regarding your joint ownership.
Or try shared ownership
There is also a scheme called shared ownership in the UK, and this enables you to buy a small share in a home instead of purchasing it outright. The rest of the home is usually owned by a housing association or similar, and you can buy more shares of the house as you get older and earn more money to do so. The beauty of doing this is that you will need a much smaller deposit to get started, so although it may be a little unconventional, it is definitely something you should not dismiss out of hand.
As you can see, there are lots of changes you can make and lots of steps you can take to speed up the process of saving for and buying your first home, and some of them might be a little more unusual than others, but they will all have the ultimate result of you being handed the keys to your first home much quicker than you might think possible. So what are you waiting for? Get out there, work hard, and make it happen.
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