Saving to buy a house can be a little bit daunting. Not only do you have to save for a hefty deposit, but you’ve also got to budget for those pesky hidden fees like stamp duty and surveys. And that’s before you even start to think about paying for van rentals, new furniture, and all those little extras when it comes to actually moving in.
So where to start? Well, take a deep breath check out our top 5 tips to help you keep your house savings on track.
1. Get the right savings account
If you’re a first time buyer and under 40, then you should consider getting yourself a LISA. A LISA is a special type of bank account where you can save up to £4,000 per year and the government will top up your savings by a whopping 25%. That means you could be earning an extra £1,000 per year for free, plus interest. The LISA can also be used when buying a house with someone else, even if that person has been a home-owner before, or has their own LISA that they’re using. There are a few drawbacks to the account though, so make sure you’ve done your research before you commit to one.
If the LISA isn’t right for you, you can still opt for a high-interest savings account. Check out our in-app partners Raisin to find the right savings account to suit you. Take a look in your Actions tab to find out more.
2. Know your options
If ‘traditional’ home ownership seems out of reach, there are plenty of other options. The Shared Ownership scheme and Help to Buy initiatives were both set up to help first time buyers get on the ladder. Not heart of them? Find out more here.
3. See if you can borrow from BOMAD
The Bank of Mum and Dad is now the ninth biggest mortgage lender in the UK. While we all love the idea of buying our own home independently, with the rise in house prices in the UK it’s often not possible to get onto the property ladder without a little help. If possible, speak to your family and see if they would be willing to help invest in your future property or give you a loan – it never hurts to ask.
4. Factor in the unknowns
The average first time buyer puts down a deposit of 20% - which can seem a bit steep when you first start putting money towards it! As well as money down for the deposit, you’ll also need savings to cover the hidden costs of buying a home, like:
• Stamp duty (which can add as much as 7% to the cost)
• Survey and valuation fees
• The cost of your building insurance policy - which many lenders will require you to have as a condition of your mortgage
Think about how much you can feasibly save each month once you take out your essentials, as well as how quickly you want to start house hunting. If you want to be collecting those keys sooner rather than later, why not take a look at your spending in your Yolt app and see where you can cut back.
5. Watch your money grow
Sit back and let your savings grow! While you’re watching your hard work build up in your savings account, make sure you keep an eye out for the perfect property on Rightmove.
Want to know how Yolt can help you hit that deposit quicker? Check out our essential guide to drumming up that deposit with Yolt 2.0.
At Yolt, we’re on a mission to empower you with your money, but our blog is not official financial or professional advice. If you're looking for more information on credit cards or debt help and consolidation, seek independent financial advice