First time buyer saving advice

Sarasand

I am planning on buying a house within the next 3-5 years. I already have some money saved but I am aware that there are many costs with deposit and other fees.

Could anyone offer some advice on what is the best way to save for a deposit and other costs.

I know about help to buy ISA and help to buy ISA but I'm not sure which is best. Also I will be a student for another year so I don't think I can take an ISA out yet.

I want to be prepared so any advice is appreciated.

cjmillsnun

You can take out an ISA as a student. As for which ISA to open, someone far more knowledgeable than me can advise.

Cakeguts

Don't buy a car on finance. Get the cheapest mobile phone you can find. Don't spend money on anything you don't actually need. You need somewhere to live and something to eat. Anything else you have to decide if you need it or not. If you can get by without buying something don't buy it.

elverson

This is a good place to start:

http://www.moneysavingexpert.com/mortgages/house-buying-guide

kingstreet

Sarasand wrote: »

I know about help to buy ISA and help to buy ISA but I'm not sure which is best.

Definitely the first one.

Sarasand

Is this not a government scheme for first time buyers?

Sarasand

Sorry didn't finish that. Meant to ask is finishing and also what's the best way to increase the chance of being offered a better mortgage?

Sarasand

Thank you, I always thought it influenced the level of student finance you received

goodwithsaving

Mortgage:
Get a credit card - use it a bit and pay it off IN FULL each month
Make sure you pay your mobile phone bill etc on time
Be on the electoral roll
Keep a record of all addresses you have provided to your bank or mobile phone company

Saving for a house:
Go for a SIM Only contract or something cheapish
Don't buy new cars etc (depreciating 'asset')
Do go on expensive holidays
Make your own lunch, go out occasionally but keep it as a treat
If buying new clothes etc, think 'do I really need it?'

Don't scrimp so much that you're miserable, but keep the end goal in sight and work towards it. I don't regret my years of 'going without' and get annoyed with my friends who have travelled and/or always had the latest 'stuff', and now moan that they can't afford a house. It isn't un-achievable if you are willing to make sacrifices to get it.

I do now take myself on holidays but when I decided to move, I opted not to go on holiday and saved the £1000 instead.
I am a bit more lenient these days but on the whole, my attitude to phones, clothes etc hasn't changed; I still consider if I really need them. I also rarely buy coffee to go and budget without realising. I did get a gym membership but decided I much preferred being outside that I cancelled it - and saved £50/month by doing so.

Good luck!

Sarasand

Thank you, how much do you think should be used on a credit card? And does just a bank one count or should I apply for a stand alone one?

nikongirl

If it's really what you want (for some people renting is sometimes a better option than buying because of its flexibility and lack of maintenance costs etc.) then make it your priority. I meandered along for ages thinking it was out of my reach, but once I really made it a priority I was able to achieve the deposit goal fairly quickly but with lots of sacrifices made willingly. I love the Mr Money Mustache analogy of every pound you earn being an employee — you want to keep as much of it as possible working for you, not somebody else.

I totally agree with everything Goodwithsaving said. It's just about being frugal, keeping your credit history clean and proving you can be responsible with credit.

As for being offered a better mortgage, bigger deposits and better credit histories will always win out.

It would also be worth considering the Lifetime ISA (LISA) as you can pay more into it than you can a Help to Buy and there are all sorts of other benefits.