How to Save for a Mortgage

Buying your first home is a huge step for anyone to make as it is very likely to be the biggest purchase you will make in your whole life.  Getting a mortgage is a huge commitment, but probably the best way to invest your hard earned pennies.

Getting onto the property ladder and getting your first mortgage can be a daunting prospect and can often feel like it is an impossible task.  However, it needn't be that way as if you really want to be able to buy your first home then it will happen.  It just requires patience and a lot of saving!

The first thing that I would recommend anyone who is saving to buy their first house to do would be if possible to move back home with their parents. Obviously this is not always an option for many people, but if it is then however difficult it may be it will be worth it.  Parents are likely to offer you better rates than a landlord and would you not rather give your rent to them anyway?!  This is an option that many young people have chosen at the moment as it can be really difficult to pay high rent and save for your first mortgage at the same time.  It is usually the best option because it means you will be able to save much more quickly compared to renting.

I would also suggest paying off all overdrafts and other short term debt if you have it (excluding your student loan if you have one) as soon as possible so that you can focus on saving for your mortgage.

If you don't already have one then get a credit card.  A credit card is a great way to improve your credit rating and ultimately your chances of being able to get a mortgage.  You may think that you have been great with your money up until now, with no debt but unfortunately mortgage providers will not see this as a good thing as they will have no previous history to show your ability to repay debt.  Obviously, only use your credit card for purchases that you require and are able to repay that month.

Saving for your first mortgage does not mean that you have to scrimp and scrape for ages, it just means that you have to be sensible with your purchases.  Make sure that you budget each month so that you know how much you have to spend so that you can still go out and have fun.  The best way to do this is to set a minimum savings target each month so that without fail you know that you will be able to save at least 'x' amount every month. 

For large expenses such as car insurance it is definitely worth paying a lump sum each year if you can so that you save money as do not have to pay the interest.  Create an online savings account and put a small amount of money in it each month so that when your next renewal is due you can pay annually. Online savings accounts are a great way of dividing up your paycheck as soon as it arrives in your account.  If you divide the money into different accounts as soon as you are paid then you will know exactly how much you have left to 'play with' and will avoid dipping into your savings.

The most important thing to remember when saving for your first mortgage is that it is going to take time but it will be worth it in the end.  The more money you can save for your deposit the better in the long run as you will get a better mortgage rate and lower monthly repayments so when you do get to buy your first home you will have more money each month to enjoy it!

Have you got any tips on how to save money when you are saving to get your first mortgage?

Love Laurashopaholic xx

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