If you’re in the market for a new home, you’ll soon discover that house hunting is not the most difficult part. Once you’ve found the house of your dreams, you can now begin the process of purchasing it. If you don’t have the cash to buy your new home, you will need to apply for financing.
Going to a bank or financial institute to secure a mortgage is a lot easier if you have a decent deposit to put down towards your new purchase. Saving up enough money to buy a home can feel like an impossible task, but with enough planning and discipline – it can be done faster than you think.
Follow these five tips and tricks below to help you save money for your deposit faster:
1. Open A Savings Account
Open and dedicate a separate bank account to saving money for your deposit. Each month, put aside as much money as you can afford, and don’t touch it under any circumstances. That helps you save money in a place where you won’t be as tempted to spend it.
You only need to save as little as 3% for your down payment – not the 20% as some sites and lenders may have you believe.
2. Budget Properly
The only way to ensure that you reach your savings goal for your mortgage is to have an effective plan in place. A good financial plan will include a detailed budget – that way you will always know how much money you have to spend on everything else including food, gas, groceries, and entertainment.
Luckily, once your budgeting details are hammered out, you can set yourself mini goals and challenges to speed up your saving journey.
3. Cut Back Spending
Think of clever and creative ways to cut back on your spending. It may seem like a nightmare but if you save enough each month, you should have enough for your deposit in 6 months to a year.
Take lunch to work and stop buying takeaway coffee in the mornings and afternoons, you’ll be amazed at how much you can save just by doing those things. Shop with coupons where you can, and avoid unnecessary expenses as much as possible. Most of the top mortgage lenders will tell you the same thing.
4. Sell Unused Furniture and Goods
Have a garage sale to make extra money – one man’s trash is always another man’s treasure. Go through each room with an attitude of getting rid of anything that has not been used in a while, every little bit will add up.
Advertise your sale on your social media pages and local neighborhood groups – the better your turnout is, the more money you will make!
5. Ask For A Raise
If you don’t have enough money to save for your deposit, it may be time to ask for a raise at work. Make sure to time your request right, avoid asking during a hectic project or when your company is going through a rough time.
The best time to ask for a raise would be during your annual performance review – if you don’t have one of these then perhaps it is time to start.
House deposits are scary if you let them seem bigger than they are, keep your cool during this process – that is the only way to stay sane.