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Three Ways to Save for a Mortgage

Now that the days of deposit-free mortgages are long gone, individuals who want to buy a house need to begin saving. Although there are still some 5% mortgages available, the majority of first-time buyers need to save as much as 30%. This may seem like a daunting prospect, but it is doable for most people. As companies like SGE Loans know, focusing on long-term goals can soon bring you closer to your dreams than you think.

Make Cut Backs

Now is the time to start making cut backs. Begin by focusing on the small things and work your way up. A great place to start is your food bill. Supermarkets have a great habit of making people think that value goods are not worth buying. They achieve this through plain packaging and careful wording. Try the goods, and you may find that you like them. After a while, you can begin working up to larger savings. Take your car for example, is it possible to downgrade it? The less your car costs, the less you will pay on finance and insurance. Similarly, it may be worth seeing if you can move into a property with a lower rent. Saving money isn’t just about what you spend; your lifestyle habits can make a difference too. Walking more, using less electricity, and turning down your thermostat can all make the small changes that build up your savings.

Start Saving Wisely

Once you have begun making cut backs, you need to start saving wisely. Everyone in the UK is entitled to an Interest Free Savings Account (ISA). Max out yours each year, then begin finding savings accounts that have the next best interest deals. The idea is to make sure your savings work well for you. At first, you may not attract much revenue for your interest. Within a couple of years, you may begin accumulating a tidy amount.  If you do need to use your savings for any reason, avoid drawing from your ISA. After drawing, you cannot re-deposit, which means you will waste money on a withdrawal.

Prepare Your Credit

Saving for a mortgage isn’t just about the money you stash away. You can make savings on the mortgage you take out by preparing your credit for it. This begins with removing any possible black marks, which means paying off CCJs. In addition, you need to prove that you are capable of making repayments. Taking out credit cards or loans with a company like SGE Loans is one of the best ways to do this. Once you have your credit and begin paying it back, you can prove to future mortgage lenders that you are capable of managing finance. This, in turn, can entitle you to a better deal. For example, you may find that you can pay a smaller deposit. This allows you to use more of your savings on making changes to a property when you buy it.

Depending on your current financial situation, saving for a mortgage can take a little while. Once you have your finances invested in bricks and mortar, though, it will be worth it.