How To Start Saving For A House

Saving for a house is on the mind of a lot of us. Actually owning our own property that we can call a home is so often high on our list of goals. The idea is fantastic, wanting your own home where you feel safe and secure and settled. But how do you actually begin saving for a house?

Pay Off Your Debts

One of the first things to do is to start paying of your debts. Debts can be a huge negative if you’re trying to get a mortgage. Clearing debts before applying for a mortgage is a great idea, and it should open you up to better interest rates and overall mortgage terms. Don’t be shackled by debt. Get it paid off before you start looking at houses to buy.

What is the average London house price?

Look At House Prices

You need to look at house prices in the areas that you are wanting to buy a property in. Where in London do you want to settle down? This will give you a figure that you need to aim for. When you’re saving for a house, you need to have a deposit (see below). A good deposit which will get you some great repayment rates on your mortgage is 20%. Anything above that is wonderful. You might still get a good mortgage with a lower deposit though. But figure out what 20% of the average house price is in the place you are looking at. If you’re looking at buying a property for £300,000, £60k is your deposit.

Pay Into A Deposit Pot

Now we know what your deposit amount needs to be, start paying into it. Rather than go for drinks and a takeaway three times a week, maybe narrow it down to once and put the money you would have spent into your house deposit account. When you start to prioritise building up your deposit, it’s surprising house quickly you can actually accumulate your cash.

Reduce Your Expenses

Start to reduce the things you pay for, then when you get your mortgage, you’ll be able to afford it. It can be a hefty monthly payment that you end up paying. Plus you’ll have other bills you might not have been paying so far. Council tax, utilities, insurance, food and drink. Then there’s things you want to do to the house to take into consideration. Maybe it needs a new boiler or some decoration. Start to reduce your expenses now and you’ll won’t feel such a massive financial impact when you have to start paying for extra things. Do you really need all those vehicles on your drive? Could you become a one car family to save some money?

What should you consider when buying a family car?

Get Some Help

You may have heard of the Help To Buy ISA but this closed back in 2019. You can still get some government help to buy your first home though. A Lifetime ISA (LISA) can be used for that very reason. It lets you save £4000 a year towards your first home and pays you 25% on top. So if you save the full amount you’ll get an extra £1000. This is a great way to get a little helping hand when savings for a house.

Be wise with your money when you’re saving for a house. You’ll get there. Set small goals and you’ll build up towards it in manageable chunks. Sooner or later you’ll be jumping for oy after having an offer on your dream home accepted and you’ll have the keys in your hand shortly after! Have fun, enjoy these times and start saving for a house.