Thursday, May 11, 2017

6 Things To Help You Save For A House Deposit

Okay, so I may have lied a bit when I said I'd be back to normal blogging as soon as I got my broadband fitted, oooops. Life is just happening, but I also still have this urge to write so whilst I'm still waiting for an aerial to be fitted outside, TV-less, I thought I'd get cracking on more house buying/homeowner posts. My life has changed since I moved out and my life is probably consumed by about 80% home things at the moment, so there's that.

So many people have been asking me questions about the whole process, I'm by no means an expert but it's crazy to think how much I have learnt during the whole process and I wish I had something like this to read, with real, relatable advice from someone young who has actually done it. From house deposits, to getting a mortgage, I'll try to cover the less exciting bits BUT things you just have to know before you enter the buying process.

Buying a house is stressful and hard, but also exciting, but the house deposit really is that pivotal part that will hold it up, and gosh it isn't easy, but it's definitely doable with the right mindset and know how. I managed to get my deposit together pretty swiftly in just under 2 years, albeit it rather rushed in the last 6 months! Hopefully these 6 things I learnt along the way will also help you to get that house deposit together quicker than you thought...

1. Help To Buy ISA

GET ONE, GET ONE, GET ONE! If you don't already have one, why not? It's totally FREE money from the government. Despite the scaremongering news articles last year that claimed you didn't get the money from the government towards your deposit, it really was a load of BS. I received just over £1,000 from the government completely free towards my deposit, pretty amazing, huh?!

If you don't already know, the Help To Buy ISA was created to help first time buyers get onto the property ladder. Most banks offer this ISA, but I took mine out with Nationwide who were also offering a pretty desirable interest rate at the time, and I'm not talking about the standard 0.05% you get on your standard bank account. KA-CHING.

The account can be opened with an initial deposit of £1,200, you must then make further contributions to it of £200 each calendar month. As long as you stick to the rules which is pretty easy, you can claim 25% of your closing balance, I think it works out at £50 for every £200 you put in. The final sum is then claimed from your solicitors, it cost £50 for the account to be closed by my solicitor, so basically one months payment from the government. 

This additional money was an absolute godsend and its FREE, there's no catches so it's 100% worth doing. Who knows how long the scheme will be around for, so it's worth enrolling in it now even if you're not thinking of buying for a few years. £200 a month isn't a massive commitment, but it will slowly build up. Take a look at the Nationwide Help To Buy Isa page for more info!

2. Monthly Savings

There's no beating it around the bush. Saving for a house deposit isn't easy, neither is it a quick thing, unless you win the lottery, and if you do I'm v v jealous. The only way to start saving quickly is putting back chunks of money each month. It really is the only way to do it if you're serious about getting X amount together in a certain time frame.

The amount you can put back each month is dependent on your income and your current living situation, but it needs to be a good chunk if you want to move somewhere fast. But even if it is the £200 monthly direct debit to your ISA to start with then that is something. If you make regular payments each month you'll start to see the money go up, and this was the motivation that I needed to start putting even more back each month. 

You do have to be strict to yourself, but you also need to remember to live. I never sacrificed my social life in the process, but those weekly ASOS ordered certainly stopped, it's only a temporary thing though, and ASOS isn't going anywhere!

3. Live At Home

Unfortunately this isn't something that is possible for everyone. But living at home is 100% the main reason I could save so much money in a short period of time. I was very grateful to be able to do so, it meant I wasn't paying out £400 + rent money each month and could devote that to my savings instead, it definitely helped to keep me focused.

Even if it means having to move back home for a few months, a lot of people have to do this and it's nothing to be ashamed about. Living is so expensive nowadays, and the reality is that having a mortgage works out at a fraction of the price that your rent would, so despite the initial upfront cost, it does get better!

4. Buy With Someone

So it's no secret that buying with someone will help you to get the money together twice as fast! Whether it's a partner, friend or family member, sometimes it's the only way to do it. It means the costs are all spread and a problem shared is a problem halved, right? 

It's a huge commitment to buy a property with someone so despite having this huge upside, you have to be realistic about it and not rush into something that isn't ready.

5. Visit A Mortgage Adviser

I would still recommend starting to save before you get to this stage, but visiting a mortgage adviser and using one was one of the best things I did. It's a must have place to go for free information if you literally don't have a clue. I didn't.

Visiting one started to make everything feel real, it gives you an idea as to how much money you can borrow, what you might need to save for a deposit, and they'll even help you to budget each month. 

I don't know what I would have done without mine at the start as the world of house buying is so scary and new when you've never done it before. I used Countrywide for mine, but there are soo many available with different agents and independent advisers so it's worth looking around to find one that suits your situation. I'll definitely be writing a full post about mortgage advisers and what you need to know in the next couple of weeks!


6. Have An End Goal

You may not know how much you can borrow yet, but as a general rule of thumb most properties need at least a 10% deposit, however I have heard of 5% deposits on new builds and even 7% deposits. 

Unfortunately I got dealt the card that I had to put down at least a 15% deposit as it was classed as a new build, despite being in a 200 year old house... That really did throw everything off. The moral is you really don't know until you start getting into the process sometimes. I always think it's better to save more than you need for a deposit anyway, as you still have legal fees, furniture and other fees to think about. 

Having an end figure is something to work towards and I set myself targets for the end of the year to reach and it definitely gives you a sense of achievement when you do hit them as saving for a house deposit certainly is no easy feat, especially if you're doing it by yourself!

Take a look at my tips on surviving a spending ban for more motivation! Do you have any other tips? Are you in the process of buying or have you just bought a property?

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