How to save for your first house now is as good a time as any!
There will come a time when you need to save for first house sucessfully. Living at home with parents or guardians is great. The bathroom cleans itself, the kitchen cupboards replenish themselves as if by magic. There’s usually a cute pet that you get to play with without having to foot the bill for veterinary costs (and without the migraines when little Rover or Mittens decides that the perfect solution to their boredom is a quick nibble or scratch of the furniture). However, independence soon beckons and you will need to start saving for your first house. For a start, simply taking your shoes off or putting your jacket down and returning to find things where you left them is a daily bliss that cannot be overestimated. Then there’s the freedom that comes with the ability to entertain guests – and perhaps a romantic interest – without keeping one eye on the time to ensure things are wrapped up before curfew.
Luckily, houses are free – we can all move out and get our own place whenever we want. Right? Haha, no, seriously, buying property is the most expensive thing you will ever do (see Creditfix.co.uk for extra financial advice). Here’s how to save for your first house.
Bank of mum and dad
The first tip is not really a savings tip at all and mayn’t be available but worth mentioning for those of you who may not have released certain options that may be open to you. That’s why the first tip is to skip the savings altogether – if your parents or guardians are able to provide the funds for a deposit on a mortgage, or if they are able to act as guarantor, speak to your mortgage lender about the formal arrangements. Simple.
Save like you mean it
This is where we pull up our sleeves and get down to the nitty gritty of saving for your first place. OK. You’re going to need a lot of money for that deposit. As in, thousands (around ten thousand? Maybe?). You may get away with saving less than £10,000 but realistically that’s a fair number to aim for. Usually you’ll want to achieve that number within about three years. That means a saving of about £278.00 – that’s every month, without fail. For three years put aside some of your wages or find an extra job that you can do to earn some extra cash. Look for an ISA with a good rate to put your cash in to.
Those are your two options. Let someone else pay for the deposit on your first place or knuckle down and save for the mortgage deposit yourself. Things to bear in mind; Even if you do have the financial backing of a parent or guardian who can support your homeownership plans, they will probably expect you to pay them back. This should also be at a similar monthly rate to the savings route (loans aren’t free!). Whichever route you decide to take, you may benefit from squirreling away a few pre-savings. To make sure you have enough put away for “treats” without having to take savings breaks. This can mean saving for 4-6 months before you begin to save for your first property. With 4-6 months of savings, you will be able to afford certain social obligations. Remember birthdays and weddings that come up as well as having money aside for the unforeseen (e.g. new tyres on a car or a dental bill).
Thank you for reading how to save for first house. This was a collaboration post all thoughts and opinions are my own.