Mortgages are more readily available than they have ever been, with many Government schemes available to help – such as Help to Buy and Shared Ownership. Yet people are still struggling to make it onto the property ladder.
The main complaint seems to be the struggle to save for a deposit. This can be tricky, especially if you are already paying a large percentage of your monthly income on high rental prices.
However, there are ways which you can save money which you may not have even thought of! Here is a list of our top 10 tips on saving some cash. Remember, if you look after the pennies the pounds will look after themselves!
Save earlier in the month.
Try putting some money away at the start of the month, shortly after you have been paid. People will live within their means, so you will probably find that if the money has already been moved to a separate account that you won’t even miss it. You could take it one step further and set up a standing order, so the money is automatically transferred each month.
Cut the extra spending.
It is always very easy to spend money where you don’t really need to. It may only seem like a small spend at the time, but these quickly add up. It doesn’t mean you shouldn’t spend money on yourself, but perhaps just cut down on the number of takeaways you eat. Miss the odd night out. Do you really need this item you are looking at online? Just look at where your disposable income is going each month. Going through your bank statements could be a real eye opener if you add up how much you are spending on certain things each month. This really could make a huge difference.
Increase your income.
This option would certainly not work for everyone but look at whether you could fit in a second job. Could you fill a couple of nights a week, or a day on a weekend? If you work part time, is there the option to increase your hours?
Bank of mum and dad.
Again, this isn’t something that is going to be available to everyone. Gift deposits are very popular at the moment though, with parents or other relatives gifting the money needed for the deposit.
Help to Buy
This is a government scheme you have probably already heard of and applies to new build properties. The rules have changed recently, and this is now only open to first time buyers and for properties within the new regional price cap. In basic terms, the government will give you a loan of 20% of the house price. This means that your deposit will be based on the part you are paying (so 80%) rather than the full purchase price. There are certain criteria you will need to meet to be eligible for this scheme. Also do bear in mind that after 5 years you will have to begin to pay interest on the loan if you haven’t paid it back.
Declutter and sell!
When packing up your home to move, you will notice just how much stuff you have that you don’t even really need or use. A good plan would be to declutter your house now! Sell what you no longer need, with the money going into your savings account. Clear out your wardrobe, loft and garage. Get to the car boot sale! There are selling sites available both locally and nationwide to easily sell your unwanted items. And you may make more money than you would have thought!
Check your bills.
Keep checking your bills to see if there is a lower tariff available. You could save a lot of money each month by doing this. Check your energy bills, insurances and such like. There are even comparison websites available for you to easily compare what you are currently paying against what is actually available elsewhere.
Shared Ownership.
This is a fantastic option if you are getting onto the properly ladder for the first time. It is a government scheme, by which you purchase a share in a property (say 50%) and pay rent on the rest. This will mean you will need a much smaller deposit, and sometimes no deposit at all. Be aware that there are terms and conditions around this, and you will have to fit their criteria in order to qualify. For more information click here – https://www.gov.uk/affordable-home-ownership-schemes/shared-ownership-scheme
Lifetime ISA
Another Government scheme for helping first time buyers. A LISA can be used 2 ways – either towards the deposit for your first home, or for your retirement. You save your money, and the government will apply a 25% bonus. Terms and conditions do apply, so please do look into this properly to see if it would work for you. More information can be found at https://www.gov.uk/lifetime-isa
Keep your eyes open for “100% mortgages”.
These are not very common at present but do show up every now and again for first time buyers! They are not easy or straightforward, and some collateral will be required, for example a percentage of the mortgage loan being secured onto a parents house. They are few and far between and aren’t always available for long, so you really do have to be on the ball to be able to find one of these. But do keep your eyes open!
If you would like any information at all regarding any aspect of the mortgage process, please feel free to contact us.