5 Tips for Saving Your Down Payment
If you’re wanting to break into the housing market and become a homeowner, the first thing you’ll often need is a home loan. The initial deposit on a home loan is generally between 10 to 20 percent of the total value of the property. There are also other upfront costs to take into account, which can take some home buyers by surprise.
The price of housing is getting more expensive, and that ultimate dream of owning your own home may be appearing out of reach. If you’re wanting to save for a deposit but don’t know where to start, there are several things you can do to help you save more, faster.
1. Take stock of your finances
Saving for a down payment takes time. By having a savings plan, you will stand a better chance of reaching your goal sooner.
The first step involves taking complete stock of your current financial situation. Gather all bank statements and track all your expenses so that you get a clear idea of where your money is going. Any ‘non-urgent’ or non-vital expenses such as take-out meals, gym memberships, recurring subscriptions, or online shopping and impulse purchases, can be canceled to save more money. You will be surprised at how much your weekly habits such as purchasing a takeaway coffee can really add up.
2. Shop smarter
Again, saving for a big financial purchase requires some sacrifice. Can you do away with expensive name brand products if it means being able to purchase a home sooner? When it comes to clothes shopping or buying furniture for your current household, you can look at purchasing second-hand or researching other saving tips.
Used goods are far cheaper than new, and will help you to curb your spending costs. Any money you’ve saved buying used instead of new can go straight into your down payment fund. Plus, make sure to check for coupons or price match policies where you are shopping because some stores may give you a discount on the ticketed price, if it doesn’t match up with other stores or ads.
3. Get help
Whether it’s financial advice, housing assistance, or asking for a pay raise at work – getting help to save for your first house can be indispensable.
If you’re buying your first home, you can skip the confusion and ease money worries by speaking to a financial advisor. They can help you to find the right home loan and guide you through the process. They can also advise you on your finances and help you not only get the best deal when it comes to a loan but provide you with realistic steps to manage your finances and increase your savings.
Another option for anyone in the market for their first home is to look into government incentives. There are options available for first-time home buyers that can significantly reduce how much you have to pay out of pocket. This also includes government grants that help first home buyers pay for their homes.
4. Consider your options
Saving for a house might pose a challenge for couples, but what about singles? Regardless of your current living circumstance, there are other options that can help you to save for a house. You can choose to move back home for a bit or house share with friends which will allow you to cut on rent and utilities.
You might also want to change how you get around – for example, using public transport instead of your car will allow you to cut on driving costs and use this money to put into your house fund. You can also consider a second income source. This might look like selling your old clothes and belongings online or turning your hobby into a side business.
There are many factors that can impact your personal position and ability to save. For some people, looking into other options can give them a bit more freedom and take the financial pressure off. For example, renting a house may offer more financial flexibility for someone who is single or who doesn’t have the borrowing capacity to buy a home.
However, if your ultimate goal is to own your own home then know it is within the realms of possibility. So long as you keep on top of your finances and treat your savings seriously.
By knowing your goals and putting a savings plan in place, you are already on the way to buying and owning your own home. While this current climate may seem like it’s impossible for anyone to save for a house, there are endless options that can be utilized to make it easier.
From seeking financial help to researching home loan options, and making full use of any government grants, you can take the necessary steps that will lead you to your goal of homeownership.