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How To Save Money For A Down Payment On A House

Saving money for a downpayment on a house can feel like something that goes on forever. You start saving as soon as you begin working, but it’s like you can never get to the amount you need. By the time you’ve saved enough money to buy a house, prices have risen again, and the cycle continues. 

That’s, unfortunately, a problem. Studies of people in the private rented sector suggest that those who don’t own their own homes tend to be worse off in the long-term. The average cost of both is similar, as you might expect, but the people who have a mortgage are forced into discipline and must save a specific amount of their money each month to repay their home loan. 

The purpose of this post is to provide you with some pro tips to escape this dynamic. We explain how to successfully save up for a down payment and get on the housing ladder sooner. Here are our thoughts:-

Ask For Help

One option is to ask family and friends for help. People are often willing to help you out to give you the kickstart you need to get on the housing ladder. Older people with plenty of equity in their homes, like your parents, might be willing to give you the boost you need. 

Asking for help sounds a little strange in our culture, but it isn’t a lack of ability or hard work that is preventing younger people from stepping onto the housing ladder. Instead, it’s the rising price of property, made possibly by a combination of inflation, cheap borrowing, and restrictions on new builds. 

Apply For Assistance

You might also want to try making a $25,000 first-time home buyer grant application. The government is making funds available for some first-time buyers to help them get on the housing ladder, giving them a leg up and preventing them from relying exclusively on rented accommodation. These grants can be highly significant and can affect your ability to get a mortgage.

Consider Other Funding Sources

If you’re still struggling to save money for a downpayment with your regular income, you might want to consider other sources of funding. Options include savings accounts, retirement savings, or credit. 

Just be careful whenever you do this, and make sure you understand the consequences of relying on such funds. Your retirement income could wind up more than you expect, and you might go into unsustainable debt. 

Open A High-Yield Savings Account

Another option is to open a high-yield savings account and benefit from today’s higher interest rates. These accounts let your money compound over time, helping it achieve even bigger returns in absolute terms. Look around for the highest interest rates and always check the terms and conditions. Some savings accounts put restrictions on when you can withdraw money. 

Save Your Windfalls

Lastly, save any windfalls you receive, such as insurance payouts, bonuses at work, or lottery wins. See these as capital you can use for investments, not money to spend right now. 

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