Top Tips to Help You Realistically Save for a House
Saving up to buy your own property is a fantastic achievement and it is something that everyone hopes to be able to do in their lives. If you have a target of being able to afford your own home, you need to be realistic in how you are going to save for it. Here are some of our best tips to help you realistically afford a home.
Research Your Favourite Areas
You should never go into a property search blind. The first thing you should do is have a look at the average prices in the areas that you love the most. This is not about trying to find a place for you to think about buying. If you do manage to find somewhere, you can bookmark it for later. However, the goal is actually to try to establish an average cost of homes.
Though you might have fallen in love with a certain district, looking at the prices of properties for sale, and the value of the closed deals, might reveal that this is an area that is well out of your current price range. Don’t despair though! Take a close look at the neighbourhoods on either side too, you might be able to find a slightly cheaper place to live that is only a few streets away from your favourite places to hang out.
Look into Mortgages
Finding the right mortgage will be massively important, unless you plan on just buying your property outright (a feat that will be incredibly difficult if this is your first property). Therefore, you should do your research to ensure that you have found the perfect mortgage for you. There are so many different types of loans out there, and you should try to find the one that you know will work best for you.
This could be a HBD loan, or a more traditional style of mortgage, or something entirely different. Whatever you decide to opt for, make sure you fully understand the terms and conditions of the mortgage, and how much the repayments are going to cost you. For instance, if you were looking for a HBD housing loan then you will need to understand the HBD loan interest rates to see if it’s the right option for you. There is a lot to think about when trying to find the perfect mortgage, and you need to make sure you pick one with rates that truly work in your favour.
Examine Your Spending
How much of a disposable income do you have? You are going to need to be able to put aside a good amount of money each month if you want to quickly build a deposit. By taking control of your finances as a whole, you will know how much you are going to have to spend. You might even be spending more than you should without realising it.
Think about adopting the 50/30/20 ratio. This is one of the easiest saving structures out there. 50% of your income each month goes to bills and rent, plus important necessities like food and toiletries. 30% then goes to your savings – in this case your collection for your mortgage. The remaining 20% is true disposable income that you can use how you please. This ratio is not fixed. It might work better for you to have a 50/40/10 ratio if you want to save up quickly. Before you know it, you might have a good deposit in place that you can use to find the place of your dreams.
Set Up Your Bank Account for Saving
Once you have worked out how much you should be saving each month for your mortgage, you need to make sure your bank accounts are set up to properly take advantage of your efforts. Your first step should be to open a separate savings account for your mortgage. Take a look at what your bank offers. You might even find that they offer a special account for first-time buyers with better interest rates than a typical savings account. If you have to go to another bank for a better deal, do not hesitate to do so.
Next, you need to make sure that you set up a standing order to move your money about. If you have to manually go in and move that 30% of your paycheque as soon as you are paid, you can be tempted to hold some of it back. You might even forget to move it and overspend for the month! Having a standing order means that the money is moved as soon as possible, so in theory you won’t even miss it from your bank account.
Follow these steps and your bank account will fill up faster than you might think! It is easier than one might imagine to save for a mortgage. You just need to be smart about how you handle your money, and disciplined in managing your savings. Do so, and you will be looking for property to buy in no time.