Buying your first home is no small thing. It is a huge financial goal for most of us, but saving up enough money for a house deposit is a huge task and one which seems impossible for many millennials. But, no matter what your salary or living costs are, there are certain things that you can do to maximise your saving power and increase the money you have for a deposit.
Track Your Spending Habits
Do you know just how much you spend each month? The simple act of writing down what you are spending per month is well-known to help make us spend less. It makes us become more aware of those spontaneous purchases and can highlight the areas where we are spending the most money, such as on takeaways or work lunches.
If you don’t already have a set budget, then now is the perfect time to set one up. The joint forces of planning your budget and keeping track of what you are actually spending will make you feel on top of your money and more empowered to save more.
There are plenty of different ways that you can keep track of your spending and budget on the go. Sure, you can create lots of charts and spreadsheets, but you can also use the notes app on your phone, or even just a simple notebook to take out with you. Writing down each coffee and sandwich that you buy will soon make you realise just how much you are spending and when.
Cut Back On Non-Essentials
There are lots of different ways that you can save money in your day-to-day life without having to go to any crazy extremes. For example, you’ve probably already started cutting back on the non-essential items, but we all need new things from time to time. If you need a new pair of shoes or some new clothes for work, then these things cannot be avoided.
If you shop online, then make sure to use cashback sites to get some money back on every purchase you make. You can also install apps on your phone and browser which automatically check for available discount codes. For new clothes, bargain websites live Everything 5 Pounds mean you can refresh your wardrobe for just a few pounds.
When it comes to the weekend, we all want to spend time relaxing and doing things that we enjoy as a break from the working week, but this is often the time where we spend most of our money. Try and incorporate a no-spend weekend every once in a while – there are plenty of free and fun things to do in your nearby towns and cities. Little things like these can quickly add up and give you a substantial amount of money to add to your savings each month.
Find The Right Type Of Loan
There are numerous different types of loans which can help you to lend money to buy a home, get equity release or to raise finance using your existing home. If you want to borrow money in order to buy a house or change an existing loan, this is called a mortgage or remortgage loan.
Home loans can mean that you use the value of your home to be able to raise finance for something else, such as getting rid of debts or buying a car. This can be called a homeowner loan or home finance. There are also home loans, which can be used to describe equity release, which is a scheme that lets you raise money in exchange for an equity percentage in your home. You still live in the house, but it may be wholly or partly owned by a finance company when you pass away.
For first time buyers and those looking to buy a new house, then there are other kinds of loans available to explore which come with special rates or repayment options.
Find A House Which Needs Some Work Doing
When looking for a home, you’re probably looking for one which will sweep you off your feet and is ready for you to move in. Unfortunately, this is what everyone else is looking for as well. Homes which have the latest features and custom upgrades are likely to cost much more than a home which needs a refurbishment.
However, finding a house in the rough can be a great way for you to save money. You can expect to save around 20-40% on a home which needs updating, but there are some things you should expect before you commit. Whilst painting and decorating is relatively easy to do, be prepared to deal with unexpected costs and planning permissions for any changes you want to make. It is recommended that you have around 20% of your total savings saved for your refurbishment.
Buying a Home in the UK as an Overseas Buyer
If you’re from overseas and looking to purchase a home in the UK, you may face additional challenges. UK lenders typically require borrowers to have a history of financial activity within the country before granting a mortgage. Many lenders prefer applicants to have lived in the UK for at least three years, as this establishes a sufficient credit history and financial stability. Without this, securing a mortgage can be more difficult, and you may need to explore alternative lending options, such as international banks or specialist mortgage providers.
To build credibility, consider setting up a UK bank account as soon as possible and ensuring you have a stable income and address history. Registering on the electoral roll, using credit responsibly, and maintaining consistent bill payments can also help establish your creditworthiness. Some lenders may require a higher deposit—sometimes up to 25%—from non-UK residents, so planning ahead and saving accordingly is key.
Consult with a spouse visa solicitors about you and your partner’s position before buying a home. Understanding these credit and financial requirements can help you prepare for a smoother home-buying journey, whether you’re a UK resident or moving from overseas.
Save Wisley
Perhaps the most important tip, it is very important that you save wisely. Whatever you do, do not let your savings just pile up in your bank account. You’re more likely to accidentally or impulsively spend it if it is in your main account that you have regular access to.
It takes several years to save for a house, so make sure that you are getting the best interest rate possible whilst you work towards reaching your target. Some government schemes offer tax-free saving accounts or add on tax-free bonuses when you reach certain amounts – essentially, this is free money that you can earn just by saving.
