How to Save for Your First Home
Preparing to buy your first house can be daunting, as well as exciting. With so much information out there for first-time buyers, it can be challenging to know where to begin, especially in the current market with headlines reporting of potential house-price crashes.
One major contributing factor to getting onto the property ladder is knowing how to save for your deposit. We’ll take a look at some ways to make the process of saving easier and help to get you on track to becoming a homeowner.
When to start saving
It’s never too early to start putting aside money for buying your first home. But it’s also important to start small, especially if you have large outgoings each month on which you can’t cut back. Ensure that you prioritise paying off any debt first to put you in a better financial position.
It’s also a good idea to look into how you can improve your credit score if this could be an issue when it comes to getting a mortgage.
Create a separate account
Removing the money from your main current account and keeping it in a separate account or online space can help you to reach your savings goals. Look into methods that could help to boost your savings such as a Lifetime ISA or a longer-term savings account that offers increased interest.
Regularly review your finances
It’s likely that you’ll already have created a budget but it’s a good idea to review it regularly to amend any incomings or outgoings. You might find that you could be adding more to your savings pot each month or maybe even loosening the strings a little if you have a bit extra to spare. The important thing is to be flexible and switch things up if your circumstances change.
Setting smaller, manageable goals can help your savings to feel more tangible and encourage you to keep at it. You could set these targets every three or four months or a couple of times a year.
Consider buying small pieces for your house when you hit a particular savings milestone, such as items of kitchenware or photo frames. This can help to keep your goal in sight and will act as a physical reminder of how far you’ve come and what you want to achieve.
Set realistic expectations
It’s no secret that it takes time to save for a house deposit if you’re a first-time buyer so try not to create a goal to save the entire amount in an unrealistic timeframe. It’s also worth considering the type of home that you’ll potentially be able to afford so you’re not disappointed when it comes to house-hunting.