Deciding to buy your first property is an exciting decision, but you do need to make sure that you are getting the most out of your deposit as possible. Since the mortgage deposit dictates the property you will be able to buy, you need to be able to make sure that you are going to be saving your funds in the best possible manner.
What Size Should a Mortgage Deposit Be?
Ideally, you want to save a deposit that is equal to approximately 10% of the value of the property that you wish to buy. Of course, you can also choose to save a larger deposit and then have less to pay through repayments.
Before you begin shopping for properties, you need to make sure that you know what you can realistically afford. After all, you need to not only be able to afford the initial deposit, but also the repayments after.
For this reason, it can be best to speak to a mortgage broker to help determine precisely what you can best borrow. Many will be able to make more accurate calculations than you would necessarily be able to do by yourself, and it means that you might be pleasantly surprised at what you can afford.
Don’t forget about some of the extras that you might have to pay too! There are many fees associated with buying a property, and you don’t want to find out that you might not have as much to put towards a deposit as you thought because of them.
How to Save
The long haul when it comes to a deposit is always going to be the actual saving of your mortgage deposit. This can be incredibly difficult to do, but there are some special products out there to help you get the most out of your savings.
Find a good ISA and get into the habit of paying into it regularly – ideally the day after you get paid so you get used to not having the money in your account. There will be a certain amount that you can save per year with an ISA, and you need to make sure that you are maxing this out. Remember to keep a close eye on the interest rates too so you can be certain that these are working in your favour.
Once you have started saving don’t touch it! It can be tempting to dip into a mortgage pot to help out with various other costs that you might encounter. However, this is never going to be worth it in the long run. Keep your saving consistent and you will see your pot begin to build over time.
Want to speak to a mortgage broker about how you can best maximise your deposit? Get in touch with GPD Mortgage Solutions today. We will be able to advise you on how to best use your savings to create a deposit to help grab your dream home.
