Everyone understands the stress of moving house, but sometimes it feels too difficult to even get to that stage. The thought of having to save for a deposit can be overwhelming, especially if you’re currently paying rent each month and watching your money go elsewhere. But it doesn’t have to be difficult, there are a variety of ways to increase your savings and slowly reach your end goal.
Patience is key. It doesn’t always happen quickly but it will happen. Just think, soon you’ll be looking online for Northampton removal companies, ready to pack up and move out. There’s a range of government schemes in the Midlands that can help, you just have to do a little research to find them. To help you get started, we’ve created this guide to help you save for a deposit whilst renting in Northampton.
Make a Plan and Set a Budget
The first step should always be to create a plan and get organised. You should work out how much you can afford to pay and roughly how much the deposit would be, giving yourself an amount to aim for. Be realistic with your calculations and think seriously about how much you can afford to pay in monthly home loan repayments.
Do some research on the areas you’re looking to buy in Northampton and work out which would be within your budget. Nothing is more disappointing than finding a home you love, in an area you can’t afford. But with a surge in recent regeneration projects in Northampton, there’ll also be a range of new-builds to add to your viewing list.
Set a monthly budget and decide how much you can realistically afford to save. Don’t put yourself under more stress by cutting down too much, make sure your current rent and monthly bills come first. Plan a budget that works for you, don’t neglect any crucial payments in the process.
Pay Off Any Remaining Credit Card Debt
Credit Card Debt is something you’ll want to tackle before saving for a deposit. You’ll want to start fresh, ensuring there are no extra financial concerns scratching at your mind. It may seem frustrating having to clear your debt when you’d rather be saving for a new home, but there are benefits to help you once it’s done.
Paying off your debt greatly improves your chances of getting a mortgage. Removing debt boosts your credit score and lowers your debt-to-income ratio making you a desirable candidate. Mortgage lenders need to trust that you can repay the loan and so removing your debt can greatly affect this decision.
The payoff for removing credit card debt with a high-interest rate is actually higher than the return you’d get from saving money into a separate savings account. Not only will you have eliminated your debt, but you’ll have accumulated extra cash to go towards your deposit meaning less worry and more savings.
Cut Down on Luxuries
It may seem obvious, but cutting down on your spending is an important factor when saving for a deposit. You don’t always have to neglect your morning coffee, but if you do go without a for a few days, then why not throw that extra couple of quid into your savings? Every little bit helps. It doesn’t matter how long it takes, if your savings are growing then you’re on the right track.
If possible, review your expenses and cut out non-essentials. Paying for a gym membership you never use? Get rid of it. Too many nights out or takeaways? Begin cutting down and cooking for yourself. It all adds up and that’s the main thing. You’ll be grateful for the extra savings when you reach your goal and can finally apply for a mortgage, starting your journey towards your new home.
Something else to consider is moving to a smaller and cheaper property. Northampton is full of a variety of affordable homes to rent, many of which will be within your budget. Cutting down your rent and monthly costs can be a great way to save in the long run and so downsizing should be something to consider.
Calculate what the cost of your commute would be if you moved and whether the bills would be higher or lower. There would also be moving costs to consider, so it would be wise to weigh up your options before deciding. If there is a substantial amount of money to be saved, then it could be a great way to see your savings grow more quickly.
Open a Help to Buy ISA
One way to help you save for a deposit is to make use of the Help to Buy schemes available. There’s a variety to choose from like Shared Ownership and the Equity Loan, but one of the most popular amongst first-time buyers is the Help to Buy ISA. It would be wise to look into all options before deciding which is best for you. To help you begin your research, here are a few Help to Buy schemes available to you in the Northampton:
- Help to Buy ISA – The Help to Buy ISA is designed to help first-time buyers save for their first deposit. Whilst saving for a 5% deposit in the ISA account, your savings will gradually increase with the government adding a bonus of up to 25% when finally purchasing the property.
- Help to Buy Equity Loan – For both existing owners and first-time buyers, the Help to Buy Equity Loan sees the government lending you up to 20% of the value of a new-build property. When combined with your 5% deposit, you will only require a mortgage of 75%. You won’t be charged with any fees for the first 5 years of your loan.
- Help to Buy Shared Ownership – The Help to Buy Shared Ownership Scheme requires you to purchase a 25%-75% share of the property where you will then pay a subsidised rent. It’s a good scheme if you have limited savings as you only need a deposit for the share you’re purchasing. A small share would equate to a small mortgage.
Scroll through the variety of Help to Buy Midlands options to discover which ones you may be eligible for. Any opportunity that could help you save more quickly is worth looking into. By applying for a scheme, you’ll become a lot more organised with your savings, gradually building up the sum.
Switch Utility Providers
Comparing services to find the best deal can also help increase your savings. It takes only a few minutes to compare quotes online, but it can make a world of difference. Energy providers, insurance providers, internet providers, there’s a long list of different services that you could compare. Get the cheapest deals and watch your savings grow.
Saving for a deposit is daunting enough without having to pay rent alongside it. However, it doesn’t have to be as difficult as it seems, there are plenty of ways to boost your savings whilst renting in Northampton. Be patient and watch the sum slowly increase. You’ll soon be on the road, keys in hand, ready to enter your new home. Focus on that end goal and you’ll be there in no time!