Once you’re married, property ownership is often next on the list of milestones as you embark upon a new life together, but in the current climate getting onto the property ladder may be more difficult than you first imagined.
With mortgage providers demanding what seems like ever increasing deposits, saving will often be the first step that you take on the road to home ownership.
Saving for a mortgage
First things first, you will need to have some idea from the outset of how much you will need to save. Take a look around at the property market to get a feel for the kind of price you can expect to pay, and be realistic about what you will be able to afford at this point. While you do need a home that is big enough to accommodate your needs, particularly if you are thinking of starting a family, it is important to remember that your first home need not be your last home.
For first time buyers most mortgage lenders will require that you have at least 10% of the value of the property to be put down as a deposit before they will lend you the rest as a mortgage loan. More often than not the figure is closer to 20% or even 25% of the cost of the property. Remember that the higher the deposit you are able to put down the smaller your mortgage loan is likely to be, which will also mean that you will pay less in interest. Saving that extra bit more can pay off in the long run.
In addition you will need to factor in other costs associated with buying a property such as mortgage lender’s fees, solicitor’s fees and of course the cost of actually moving, right down to paying for the moving truck if you need one.
Once you have worked out a savings goal, there are a number of steps that you can take to help you get there including:
- Breaking down your monthly income and expenses. Working out what money you spend on what can give you a very good idea of what your spending priorities should be and what you can easily cut back on.
- Budgeting. At this point the value of the budget cannot be over-stated. A budget can help you recognize when you over-spend, and make sure you have enough to put aside for that mortgage savings account at the end of the month.
- Save wisely. Stashing your money under the mattress is not the only way to store your money. Shopping around for the best possible savings account and interest rate is important in making sure that your money doesn’t lose value (as a result of inflation) and could mean that you could actually earn a little bit extra for your cash through interest.
Saving for a first home should be an exciting time, but also often requires dedication and hard work. While living frugally for a few years may be a necessity, crossing the threshold of your new home keys in hand can make it all worth it in the end.