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Buying Your First Home: What You Need to Know and Extra Tips!

Buying a home is likely to be the biggest purchase that most of us make during our lifetime. For my boyfriend and me, purchasing a property is something that we are currently saving towards. We’ve already made a small dent toward our deposit and are currently weighing up the best option on the type of property to buy.

If you’re in the same boat as us or you’re contemplating buying a house within the next few years, here are a few helpful tips we’d like to share with you.

Do You Need a Mortgage?

Unless you have the cash to buy a home outright or have relatives that are able to help you, you’ll have to get a mortgage. Essentially, a mortgage is a loan that you take out over an extended period of time. Most lenders require that you put down a deposit first before taking out a mortgage. For example, if you’re planning on buying a home for £150,000 and had saved £15,000, that would be a 10% deposit. Generally, you need a minimum 5% deposit to buy a property and then you will pay back monthly instalments on your mortgage over a set number of years (including added interest).

Calculating your mortgage payments ensures you know if you can afford to purchase a property. You can determine what your monthly mortgage payments will be, what your total interest payable is and how much you’ll repay in total.

Is There Any Help You Can Receive Towards Buying a Home?

Yes. Luckily, there is some help out there for first-time buyers in the UK. There are several schemes, including shared ownership, help to buy equity loans and rent to buy. I opened a Help to Buy ISA which unfortunately you can no longer open. With this savings account, the government top up 25% of your account (up to £3000) and you can save a maximum of £12000. We intend to use this towards our deposit. Remember, if you do have one of these accounts, you need to use it by November 2030.

House Prices in The UK

House prices have skyrocketed in the past few years, especially since COVID. Even though we live just outside of Manchester, the housing market struggle is real and it’s something we’re worried about. Obviously, if you’re in the UK you’ll be aware of the rising costs of living. Sometimes I do wonder if we’re ever going to be able to save enough to be able to buy. At present, we’re renting which takes up the majority of our monthly wages. Realistically, we don’t have the option of moving back in with our parents to save up. We just wouldn’t have the space we need, and we prefer to have our own freedom. Right now, we’re chipping away slowly. If you want to know how, here are a few ways you can start putting money away.

Tips for saving for a house deposit:

  • Have an overview of ALL your incomings and outgoings
  • Determine what outgoings you can reduce – do you really need a TV subscription? Can you reduce your weekly supermarket bill? Can you go without your daily coffee etc?
  • Are there any bills you can reduce? Always check comparison websites for car insurance, energy etc
  • How much can you realistically save per month?
  • Can you make any extra money – there are so many ways to make extra cash online. Try doing surveys, shopping through cashback sites, selling things on eBay or Facebook, do mystery shopping, being an Uber driver…the options are endless if you want to make a bit of extra cash each month.