Alternative Ways to Save Money Buying Your First Home

ways to save money buying your first home

Buying your first home tends to be something we now see as a huge ambition. With hefty deposits and rising house prices many of us stick to renting which can often lead us to getting stuck in a cycle of paying rent and never having cash left over to save. However with new options opening up the property market and getting first time buyers in the market sooner than thought possible, buying your first home has never been easier. So if you’re a first time buyer, no matter where you’re looking to live, check out these options.

Shared Ownership

While you may think this involves sharing your home with people you’ve never met, shared ownership is in fact a government scheme that allows you to buy a portion and rent the rest. You ultimately share the value of your home with a non-profit housing association who charge significantly lower rental charges than that of a private landlord. These homes, whether you’re looking at shared ownership in Birmingham or houses for sale in London, can help you find the ideal home in a sought after area that you may have previously dismissed as being financially unfeasible. In addition to this, the deposit will be just 10% of the portion you wish to own and so for 25% of a property you will pay just 2.5% deposit. These homes range from bigger 4 bedroom houses to studio city apartments so you can find something that suits what you’re looking for.

Read more: Inside the Decision to Buy or Rent a Home

Help to Buy homes

This relatively new option allows you to pay just 5% deposit for a property while receiving a 20% equity loan from the government. This scheme is ideal if you want to avoid having to pay a large amount upfront and pay comfortable amounts. With a mortgage of just 75% the value of the property you can choose a plan that suits you knowing the amount you will be borrowing is an affordable and manageable amount. The loan also comes with no interest for 5 years and so you have plenty of time to settle into your repayments and being a new home owner.

Help to Buy ISA

This option is perfect if you’re looking to save up for a deposit while still having the freedom to choose and go at your own pace. The help to buy ISA allows you to save up to £200 a month with a maximum initial lump sum of £1200. The government will then boost your savings by 25% which means you could receive an extra £3000 should you save £12000 in total. Unlike with a normal savings account you can’t put back in any cash you take out of it and so you are more likely to keep track of your money and avoid dipping in and out of your savings account.

Read more: A Beginners Guide to the ISA Individual Savings Account

Whether you’re looking for shared ownership or just an easy way of saving, getting on the property ladder needn’t be difficult. Your home is one of the biggest investments you’ll make so why not explore home ownership alternatives that you may not have thought of?

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