It isn’t easy to save money for a house.
Lenders often require large deposits and property prices keep rising.
You also need to be able to afford to run the house once you have bought it.
However, there are lots of methods that will help you to save money for a mortgage.
Keep reading to find out what they are.
1. Setup a standing order for savings
It can often be tempting to spend an extra bit of cash when you first receive your salary.
This can contribute to you not having much left for savings near the end of the month.
Standing orders that transfers money into your savings account at the beginning of each month enable you to budget more successfully.
2. Avoid an easy access savings account
It can be tempting to transfer money from savings accounts to your main current account.
You choose a savings account that has a minimum notice period before you can take out money – for example, 90 days. This prevents you from using your savings account funds unnecessarily.
Savings accounts with longer notice periods also tend to have higher interest rates, making this option a win-win.
3. Evaluate your spending habits
If you are serious about saving money for a mortgage deposit, then it may be time to consider reviewing your spending habits.
This might lead to you significantly increasing your savings over the course of a month or year.
It may help to print out your bank statements from recent months and look for areas where you can cut down on your spending.
For example, you might discover standing orders or direct debits that you’ve forgotten about, which could be cancelled.
4. Get a second job
Finding a second job to increase your income is a temporary solution that some people opt for when trying to save money for a mortgage deposit.
Popular second jobs that can fit around a full-time career include being a delivery driver, an uber driver, or working zero hour contracts in a kitchen.
While some of these jobs may not seem glamorous, they can help to increase your income, and therefore enable you to save more money.
It doesn’t have to be a permanent career move, as once you reach your target amount, you can always quit your second job.
5. Move back in with your parents
Sometimes, people struggle to save money for a mortgage deposit because most of their money goes towards paying rent.
In this instance, you may want to consider moving back in with your parents (for the short-term) to reduce your outgoings.
While your parents will probably want you to pay rent while living with them, it is likely to be a lower figure than you are currently paying by living in your own place.
This route can therefore help you to save money in the short term, until you have the deposit you need.
Keep in mind that while it is sometimes possible to get a mortgage without a deposit, this is extremely difficult.
6. Sell things that you no longer require
Over the years, the number of belongings that you no longer need can slowly mount up.
Clothes and shoes that you don’t wear, furniture that is hidden at the back of the garage, or even toys that another family might love to inherit, are all items that can be sold for extra cash.
Online sites like Facebook Marketplace, Depop or Ebay are ideal for finding suitable buyers.
7. Team up with someone else
When you team up with a friend or family member, it can bring you several advantages.
Firstly, you and your friend can hold yourself accountable regarding your spending habits. If either of you sees the other one using money unnecessarily, you can keep each other on-track.
Teaming up with someone else can also make a mortgage deposit much more affordable.
If you agree to buy a place together, then pooling your money can greatly increase the deposit that you can put down on a house.
Your combined salaries will also improve the amount that a mortgage lender permits you to borrow.
8. Find a lodger for your existing place
Some landlords allow you to sublet the place you at staying in, as long as you follow their rules, and it doesn’t affect your ability to pay rent.
Once you have permission, you may wish to rent a spare room out to a lodger to make extra cash.
While in the short-term, you could be reluctant to share your space with someone else.
9. Move into a house share
Instead of bringing someone into your rented property, you could also move into someone else’s.
This would ideally have the same effect as the above solution – saving you money on bills and rent, since you are sharing these fees with another person.
10. Be realistic about your price range
Everyone dreams of moving into a large, beautiful house in their early 20s.
Unfortunately, this isn’t always achievable. So, in addition to all the money-saving strategies outlined above, you should also speak to a mortgage advisor, consider your salary, and decide on a price bracket that you can realistically aim for.
To have a mortgage accepted, not only will you need a sizeable deposit, but you will also need a large enough salary that the lender approves you borrowing the remaining amount.
