Saving for your first home

If you are saving for your first home you will understand better than anyone how difficult it is to raise finance for a deposit. When you first decide to save for a house you will undoubtedly be full of excitement about the possibilities before you and are sure to be on the lookout for your perfect home. This excitement can wane however once you really start to scrimp and save, here we have given you some tips on how to maximise your savings:

Cut Back:

This may seem like an obvious suggestion but draw up a budget and identify any areas in which you can cut back. Suggestions include:

• Making your own lunch rather than buying one each day, it may only be a few pounds here and there but it all adds up!
• Cancel your gym membership and take up a free hobby such as running or walking.
• Arrange dinner parties with friends rather than meals out.
• Use auction websites such as ebay to sell any unwanted items
• If you can, walk to work. With steep petrol prices this will save you money in the long term.

Save in the right places

With all the effort you are putting into saving you want to make sure you can get the most out of them. The best way to save is to set up a standing order from your current account to transfer money to a high interest savings account each month. A ISA is ideal as it allows you to earn interest tax-free on your savings, compare the best ISA’s available at Moneysupermarket.com.

Some savings accounts will actually help you achieve a lower deposit. Nationwide have launched a Save to Buy savings account which allows first-time buyers to apply for a 5% deposit mortgage when they’ve been saving in their Nationwide account for 6 months or more. It also gives savers a cash back award to spend on home improvements.

Add £1000-£2000 onto your savings target

If you are concentrating on achieving a specific deposit (say 10%)  it is worth saving an additional £1000-£2000 to cover the Hidden Costs of Buying a Home. By saving this money upfront it will prevent you from entering into your mortgage in debt and allow you to use all your savings on your deposit.

Remember, the more you can manage to save for a deposit, the better mortgage deal you’ll be able to achieve.