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How to Afford Your First Home

Owning your own home is a great step towards personal and financial freedom. With your own home, you can decorate how you like and don’t have to worry about losing your deposit. Plus, those monthly payments feel like less of a waste when you consider the valuable asset you’ll have at the end of them. But taking that first step on the property ladder can often feel impossible. With the help of the right savings accounts and cheap storage in London, among other things, you can afford that first home you’ve dreamed of.

Here are some tips to help you get to that position.

Think smaller

If house prices still seem way out of your budget, then maybe you need to think smaller. Do you really need that spare room or a house with a garden? Your high standards could be what’s holding you back from getting on the property ladder. If you’re worried about the amount of space you’ll have in a smaller house, then you might have to downsize before you move.

Sort through your belongings to decide what you really need to keep, then re-evaluate how much space you need once your belongings have been reduced. If you can’t get rid of enough, then you can also store some things before you move into your new home. This will let you buy a smaller, more affordable house and you can keep your belongings in a storage unit until you can afford a house with more space or add an extension on. You can find cheap storage in London to help you achieve this.

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Start saving now

Hopefully, you already have a savings account that you’re topping up on a regular basis. If not, then don’t panic, just start today. Even putting away small amounts each month adds up over time, allowing you to afford that elusive deposit. Delaying it for longer because you don’t think you’ll be able to save enough will never help you move forward towards your goal of owning a house. Read these tips to help you cut down your spending in simple ways.

Make the most of government incentives and savings accounts

Taking a trip to your bank and booking an appointment with an advisor is a good idea. They’ll be able to give you all the information about different savings accounts and which option is best for you. Some savings accounts will offer better interest rates than others, so make sure you’re saving wisely.

Anyone who got a Help to Buy ISA when they were available is in a good position. Anything they put towards a deposit on a house will be topped up by 25% by the government. Make sure you’re aware of any current incentives like this one and make the most of them while you can.

Improve your credit score

When buying a house, having a good credit score will help you get your mortgage application approved. If you have a bad credit score, then this will make things much more difficult for you. So, while you’re saving up for your first house, it’s a good idea to start working on that credit score. You can check your credit score online for free to see where you currently stand.

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There are various things you can do to improve it, such as paying off any debts you have and making loan and credit card payments on time, consistently. If you’ve never had a credit card, then it might be worth applying for one, as long as you’ll use it responsibly and make your payments on time. You should also cancel any unnecessary payments that come out of your bank on a regular basis, like a gym membership you never use but are still paying for.

Buying your first home takes some hard work but it isn’t impossible. Start living more frugally to save money, make sure you’re managing your debts and payments, and think about buying a smaller house in a more affordable area to bring down the price of that deposit.

How to Afford Your First Home
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