Buying your first home can be an exciting moment in your life. However, for many people the potential cost involved can seem daunting.
Before you finalise your mortgage, you may need to save a deposit of at least 20% of the total value of your property. Depending on your circumstances, this may take some time - but you may be able to speed things up by following these savings tips…
Your first step towards creating a home ownership savings plan should be to review your current spending habits and identify areas where you may be able to cut back.
Creating a budget can help you to set spending limits and determine how much you should have left over each month to put towards your deposit.
Action: If you would benefit from some help in reviewing your spending, why not book a consultation with one of our financial planning specialists?
Having a savings account dedicated to building your home deposit can help you to keep a clear view of your progress, and to separate your mortgage savings from your everyday outgoings. Some accounts also offer bonus interest rates that can help you to reach your savings goal faster.
Action: Take a look at our savings account options and contact us if you’d like to discuss which account might be the best fit for you.
Finding out how much you could borrow on a mortgage can help give you an indication of the type of property you could afford. It may also help you work out how much you would need to save for a home deposit.
Once you have a clearly defined savings goal in mind, it will be easier for you to focus on achieving it. Don’t forget to consider other possible expenses involved in buying a home, such as legal fees and moving costs.
Action: Try our mortgage borrowing calculator for an indication of how much we might be able to lend, and speak to a member of our team if you’d like to discuss the likely deposit size that we would require from you.
In addition to cutting your monthly expenses, another good way to build up a deposit faster is to look into ways to increase the money you already earn.
A low to medium risk investment strategy could help you to end with a greater deposit than you could otherwise have saved for yourself. However, you should exercise caution – investments do not come with guarantees, and you could end up with less than the amount you put in.
Action: Explore your investment options and book a consultation with one of our financial planning experts to discuss a plan that might work for you.
Many people looking to get onto the property ladder for the first time could benefit from the support of their parents and loved ones. If you’re fortunate enough to have people in your life who could potentially help you, don’t be afraid to reach out.
At HSBC we offer a Family Springboard Mortgage that could allow you to borrow up to 100% of the value of your home – meaning little or no deposit required. To take advantage of this, you will need a relative or loved one who is willing to offer up cash or property as security.
Action: Take a look at our Family Springboard Mortgage, and discuss with your loved ones if you think this might be an option that could work for you.