When you are taking out a mortgage on a new home, one of the best things that you can do is to save up as much money for a deposit as possible. Financial experts advise that you save up at least 20% of the house value for a deposit.
Being able to pay a larger percentage of the mortgage as a deposit will offer you a lot of advantages; you will generally get a better interest rate, you will have lower monthly payments and you will save thousands in interest over the lifespan of the loan. However, saving up such a large amount of money can be a challenge, but there are strategies you can use to reach your goals sooner.
Break it Down into Smaller Chunks
Sometimes trying to save up for a very large amount can be discouraging, so instead break it down into smaller chunks. If your goal is to buy a house in two years, you can divide the amount to save up by 24 so that you know how much you need to save per month. This will make it a lot easier to envision how you will adjust your budget and cut down your expenses to make this goal. Track your monthly progress on a chart so that you will stay encouraged along the way.
Sell Unnecessary Things Around The House
Take a look around your home and see if there is anything that you are not using which you could sell and put towards your deposit. Selling off any sports equipment, vehicles, clothes or any other items will not only help you make some extra cash it will also free up more space in your home.
Work a Second Job
Another way to get to your goal sooner is to take up a second job for a while and put all of the extra money into your mortgage savings. There are many options for casual work on a few evenings and weekend days per week. You might be busy for a while, but it doesn’t have to be permanent as it is just a way of meeting your savings goals faster.
With these strategies, you will be well on your way to saving up a deposit for your first mortgage, after that you just need to ensure you get the best mortgage rate available for your circumstances. To do this, it’s recommended that you speak to a free whole of market mortgage advisor who can find a deal best suited for you needs.