Are you struggling to know when and how to save on your mortgage plan when buying a home? It can be a daunting experience, but having a clear and realistic plan is the first step to make your goal achievable.
Think about approximately how much would you like to save. The bigger your deposit, the less you’ll have to borrow for your mortgage, and the less interest you’ll pay in the long run. You’ll also find that the better your credit score, and current situation, the better rate you’ll be offered, and this can also save on your interest payments. Your deposit covers at least a 5% of your total property cost, but by saving a little more, you can get that percentage up, and save money.
How can I save for my deposit more quickly?
After thinking through how much you need to save, the next step is actualising your plans; setting a plan on how much you need to save a month, in order to achieve your goal. Below are some ideas on how you can do this:
Narrowing down your bills
You can start by reducing your outgoing bills, thus aiding you in saving. You may opt to switching to cheaper tariffs, cheaper shopping, avoid unnecessary subscriptions and canceling unused subscriptions such as clubs, gyms, TV, and music streaming, magazines and newspapers, etc., in the meantime.
Cut down on your daily spending
Did you know, cutting down on your day-to-day spending, no matter how small, as little as £5, can really add up to considerable amounts with time? Check out your financial statements, maybe you never knew you spend roughly £700 on coffee and £300 on clothing annually. Identify such areas and try to cut the costs down, and channel it towards saving on your mortgage deposit.
Earn from the things you usually spend on
How often do you use your loyalty card’s while doing your shopping? Using them more often could aid you in saving towards your deposit by redeeming the earned points when applicable, and channeling the amounts you would have incurred, towards your deposit savings. Also, ensure you use your credit card responsibly, avoiding overspending on them, and paying it off each month as this could damage your credit score, especially when applying for a mortgage loan.
Consider a budgeting/saving app
Monzo, Revolut, Starling etc. are some of the apps which you can use to evaluate your spending habits, helping you on saving. However, note that these apps may be for purely saving and do not give interest to your saved amounts.
Make extra cash
Money is never enough, and one way of achieving your target faster is increasing on your income. There are thousand ways in which you can accomplish this; for instance, from freelancing after work, selling out stuff you don’t use anymore, picking up a weekend job, etc.
The list is endless, remember, the key principle is to take measures that ensure you have an increased income flow and reducing on your expenditures with a detailed strategy. Saving on your mortgage deposit will come easier than you ever expected.
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