Top tips on saving for your next home
Saving for a new home whilst paying your current mortgage can be tricky. But the good news is that making small changes to your spending habits can go a long way. If it's time to upgrade and find your ideal home, follow our top tips on saving for your next house.
Work out your finances
Saving for your next home starts with looking at your current financial situation. Once you have worked out how much your monthly income is and what your outgoings are, you can see how much you need to save for your new home. It would also be worth finding out how much of your mortgage you have paid off. You can do this by using a Mortgage Balance Calculator, or by contacting your mortgage provider. If you have paid off some of your mortgage, you will own more of your existing property than when you first bought it. This is useful when you come to sell as you will owe the bank less.
When looking for a new home it's useful to understand what is within your financial reach. Remember that there are a range of affordable homes and different buying schemes available to help first-time buyers or current homeowners step up the property ladder. Part Exchange is a scheme that could see Barratt Homes buying your existing property, so that you can move into your new home quicker. But, as always, it's best to do your research before you dive straight in.
Create a budget planner to help you save
Once you have understood your finances, it's time to set a budget. This can include the budget for your new home and what you will be spending each month. The Money Advice Service have designed a helpful tool that creates a plan for your budget. The online tool looks at your current income and outgoings then it calculates what you need to do to save money. Using this to see what you're currently spending is a great way of setting your budget. It's also a good idea to set a savings goal. If you know how much money you need for your new home, then you can work out a plan to get there.
Get your home valued
Having your house valued will help you understand what it'll be worth when you come to sell it. If you have paid off some of your mortgage, you will owe the bank less. If your property has gone up in value, you will make a profit and this will go straight into your pocket. Once you have sold your house, you can use this extra money to pay off any legal fees, such as estate agent fees. This will take a little pressure off your savings.
Read here for more information on how to get your house valued.
Invest in a high interest savings account
If you have already bought a home, you may be familiar with high interest ISA's. These bank accounts help you to save monthly whilst building up interest. Opening one is easy, but finding the right one for you can be a little trickier. Speak to your current bank to see if they have any accounts that will work for you. Alternatively, there are a number of online help tools or websites that offer advice on the best savings account for your circumstances.
MoneySavingExpert.com have a detailed page on what national banks are offering at the moment.
Make small lifestyle changes
When saving for your next home, changing your spending habits are a great way to save money. Make small changes such as shopping at a different store or stay in to watch a film. If you still want to indulge and have an exciting weekend, then why not take advantage of free museums and galleries? There are free activities available in almost every region of the UK, so there is always something to do, even on a budget.
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