More tips on saving for a house deposit
Getting onto the property ladder is one of the prickliest problems of our generation and one that is affecting record numbers of people. The housing market has turned into a very different environment to what it was 10 or 20 years ago, one occupied by the “haves” who own their own properties and choose to buy more as a sound investment, and the “have-nots” who constitute their tenants.
The key to transitioning from the latter to the former is all about making that first purchase. The mortgage payments themselves are not usually the problem and can be less than you spend on rent. The real obstacle for most is accumulating the requisite deposit, which could be anything from £15,000 right up to a six-figure sum.
Get your debt under control
It’s well and good talking about the savings you can make by cutting the gym membership or foregoing the trendy coffee shop on the way to work, but if you are still haemorrhaging money from other directions, it is going to make little difference.
Most of us have a degree of debt, whether it is from student loans, credit cards or car finance agreements. That’s part of life, but it is easy for it to just keep creeping up from year to year. And ultimately, that is going to lead to disaster.
Sorting out your credit is the first step towards freeing up more cash and therefore being able to save. It’s well worth talking to a credit management expert like Credit Fix to explore the options that are available to you. It’s not always the easiest conversation to start, but you’ll feel 100 times better when you’ve done so. And remember, these people do this kind of thing every day, and they’ve seen it all, so even if your finances are worse than you’d care to admit, they will not be shocked!
Don’t miss the elephant in the room
Where does most of your money go at the moment? If the answer is “on the rent” you really need to think big in terms of the changes that will make a difference. Rent is often dismissed as being “dead money.” Unlike a mortgage payment, it is not going towards any sort of tangible asset. If you’re determined that home ownership is the path you want to take, then you might need to take a step away from the rental market entirely.
There are government initiatives that can help you here, and specialist lenders who will offer you higher loan to value ratios – meaning a lower deposit. However, these are likely to attract higher interest rates, and will also be dependent on your credit history and ability to repay – another reason to get those debts under control.
It might sound dramatic, but the option of moving in with parents or other family, even for a few months, is one to seriously consider. It can be a great way to form a whole new kind of bond in adult life, something you might not otherwise get an opportunity to do.
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