If you’ve decided you’d like to own your own home, there are a few things you can do to make the process easier. Saving for a deposit is often the biggest hurdle before you get on to the property ladder. Here are some ideas from MoneyForce to get you started…
How much deposit do I need to buy a house?
Try to save between five and 20 per cent of the cost of the home you would like, so if you want to buy one costing £150,000, you’ll need to save at least £7,500. Saving more than five per cent will make it easier to apply for a wider range of cheaper mortgages.
Make sure you can afford your monthly repayments
If you are a first-time home buyer, the most important thing to bear in mind is whether you can really afford to take this step. It’s wise to put together a budget before you start looking for a property and remember to factor in potential interest rate rises.
Finding money to save
As an Army family, you’ll be able to get a fairly clear idea of how much your income might rise over the next few years. You might decide to accept a reduction in living standards now for the sake of owning your own place, in the knowledge that you are likely to catch up in a few years. Only you can decide where that balance lies.
Take a long, hard look at your budget and use an online savings calculator to work out what money you’ve got coming in and going out. How much can you afford to save every month? What can you cut back on to save those extra pounds? There are lots of budgeting tools available online to help you.
Ways to boost your deposit
The Forces Help to Buy scheme offers an interest-free loan of up to 50 per cent of salary (capped at £25,000) repayable over ten years, which can be used for your deposit. There are also a number of government-backed schemes aimed at giving first-time buyers – and movers – a helping hand onto the property ladder.
More than just the deposit
As well as saving for the all-important deposit, don’t forget to budget and save for all the other costs you may have to pay – even before you get to buy any new furniture:
- Mortgage arrangement and valuation fees
- Stamp Duty (or Land and Buildings Transaction Tax in Scotland)
- Solicitor’s fee
- Survey cost
- Removal costs
- Initial furnishing and decorating costs
- Buildings insurance.
Find the best savings account for your money
Compare savings rates online to get the best deal for your deposit. The Help to Buy ISA pays first-time buyers a government bonus. For example, save £200 a month and they will add £50, up to a maximum of £3,000, boosting your ISA savings of £12,000 to £15,000.
Further information
MoneyForce, Money Advice Service, Forces Help to Buy, Services Insurance and Investment Advisory Panel