The 'We're saving for a deposit' thread

ZoeGirl_3

Just wanted to say that after posting haphazardly in this thread for a year or two I did save $60k and just purchased my first property!!

It is a rental property (in New Zealand, about 45 mins from where I live) so am going to go into fast track savings mode as I want to purchase another property within the next year.

Will be paying some of additional money off loan and saving some of it too. To make sure I have an emergency fund that is adequate.

slowlyfading

congrats zoe :j :j

SG27

tara747 wrote: »

I know, it is hard going sometimes and you do have to make sacrifices here and there... but we are lucky that we are both on decent salaries and able to save while still having a life.

Seeing house prices dropping so much is a fab motivator!!!! :T

We've made a lot of sacrificies to get to where we are.

It's great to see all the news articles of house prices falling are very encouraging. Deposit going up and prices coming down is great! Makes you realise there's no rush and to save as much as possible!

We should have about £80,000 by early next year but might give it another year saving to see if we can reach £100,000!! :j :j :j Which would be at least a 50% deposit and give us a very good rate :j

sKiTz-0

Hi all, I drop in on this thread from time to time and just wanted to ask a question if people wouldn't mind giving some answers/views on it?

I'm saving up for a deposit myself. Am 27, had a light bulb moment just over 2 years ago (September '08) at over 8k of debt, having been a student until the year previously. Long story short, I got a second job and paid every spare penny off my debt in June '09. Since then, for the last year and a half, I have given up the second job and try to squirrel away every spare penny for a house deposit. I am living with my Dad while I do this, to try and cut back as much as possible and save while I can! I currently have a personal target of 20k by year end, which I am on track to make. However, I got a letter from the tax man saying there was a mix up with the tax codes on my second income and I owe them 2k!! They will be collecting this next year, so I will have to lower my target for next year.

I will be buying on my own, so only have the one income, which makes saving up the figures required even harder.

My original plan was to save up enough to buy a house with cash outright, as I don't like the idea of having a mortgage payment to find every month. But when I ran some figures last year it concluded that if I carry on saving now at this rate (which is hard going on a below national average income) for 5 years, the chances are that HPI will wipe out my deposit saved. To buy outright I would have to have a lot of luck with investments/interest on savings rise/house prices staying stagnant for the next 3-5 years. I'm not so sure it's possible anymore, and although still aiming high, I have been looking into mortgages.

Realistically, to keep the repayments affordable I would need at least a 30% deposit, otherwise repayments are too much and I would be overstretching myself. I could get cheaper deals on a tracker/variable rate mortgage, but I don't believe the interest rates will stay low forever, and I don't want to be at the mercy of the BOE.

So I was thinking of saving 30k as fast as I can to put down on a deposit, so I can look at properties worth up to 100k. However, this would not include all the charges/fees/surveys etc PLUS I am a FTB, so would need everything else (all furniture, white goods etc) I was thinking maybe 10-15k budget for that & decorating.

So again, the ball park figure has risen up to 40-45k! And that's looking at the lower end of the property ladder.

Another thought that then entered my head was looking at cheaper properties to increase the relative size of my deposit. Maybe I could pick up a terrace in my area for 70-75k, giving me a 40% deposit. This would mean a better deal on the mortgage and even lower monthly repayments.

At the moment I am nowhere near where I think I need to be. I am bouncing all of these possibilities around my head, but as the markets are so up in the air at the moment I figure I will re-assess when I am in more of a position to buy. Although in the meantime, surely it can do no harm to keep a keen interest in the market and see what trends it throws up.

Onto my question - I was curious as to what sort of figures/% deposit everybody was aiming for? How/why you decided on that figure. When do you think the time is right to stop saving for a deposit and start buying?

At the moment while house prices are fairly stagnated, it is doing me no harm to sit back and save and get myself in a better position. Hopefully I will be able to make it before house prices/interest rates rise, and if not then at least hopefully I will be in a position to act quickly when they do and get the best deal I can.

So my answer would be: I am looking to save 40-45k. 30k for 30% deposit, 5k to cover fees/surveys etc, and 5-10k for furniture/decoration/repairs/renovation. This should be achievable in another 2-2.5 years for me.

Thanks for taking the time to read/answer.

sKiTz

louby_lou

well. my partner doesnt earn enough to save anything unfortunately so i am saving our deposit from my own salary which is tough. we are aiming for £20k minimum on a place around £150k (hopefully closer to £130k if prices keep going the way that they appear to be...) however we have been renting for a while and are in no massive hurry. I'd love to be looking at places this time next year tbh - looking for a 2 bed place so we can stay for a long while.

our price is dictated somewhat by high prices in the city we have decided that we want to live in, however im not looking for a palace, after all we have lived in some dives in rental land! I'm looking for a fixer-upper.

might have to have a fantasy browse on rightmove now to keep motivated!:D

alja

Does anyone know what the average amount of deposit that is put down on a house these days?! I've heard it's about 10% - 15% is this correct or completely wrong?! lol!
I'm quite young, but want to be clued up on a rough amount that needs to be saved up for it?? any help would be great!

tara747

sKiTz-0 and ALJA - OH and I are saving till we find the right house in the right area at the right price. We keep an eye on the market but haven't yet seen 'the one'. We have plenty saved already (about £55,000 between us so far) so we can go for it whenever we want.

But I am more than happy to keep saving and have as small a mortgage as possible. Don't worry about HPI, prices will keep falling for a few years yet!

alja

Thank you tara747 for your reply! I guess the name of the game at the moment is to save save save! I am young to be thinking about this kind of thing, but being unusually good with my money for my age I thought I'd ask where to start! So thank you for the reply

Doshwaster

ALJA wrote: »

Does anyone know what the average amount of deposit that is put down on a house these days?! I've heard it's about 10% - 15% is this correct or completely wrong?! lol!
I'm quite young, but want to be clued up on a rough amount that needs to be saved up for it?? any help would be great!

10-15% is the minimum you need to be looking for the are almost no mortgages on the market which will accept less than 10%. The more money you can put down the better the interest rate you will get. The best rates for first time buyers tend to kick in at 25% deposit.

I'd would suggest you play around with some mortgage calculators and see what different interest rates and deposits have on the monthly repayments. Work out what you can afford to pay per month then work backwards.

SG27

ALJA wrote: »

Does anyone know what the average amount of deposit that is put down on a house these days?! I've heard it's about 10% - 15% is this correct or completely wrong?! lol!
I'm quite young, but want to be clued up on a rough amount that needs to be saved up for it?? any help would be great!

I read somewhere that the average first time buyer deposit is 24% I think it was on something from the council of mortgage lenders.