5 Tips on Saving for a Mortgage Deposit in 2024

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Buying a house is always a big step. It probably means that you are either ready to stand on your two feet and leave the parents’ nest, or you are about to form a family with your significant other and start a new life. Whatever the case may be, purchasing a property isn’t something that you can do overnight.

Firstly, you have to try to picture which way your life will develop. Where do you want the property to be located? Are you going to start a family soon? How many bedrooms do you need? Do you want to have a big backyard? Answering these and many other questions is something that you have to do to be certain that you have chosen the right house or apartment.

Next and the most important thing is money. It is probably the biggest investment that you are ever going to make, meaning that you need a lot of money on your savings account. Naturally, you can turn to a bank to get a loan, but right at the beginning, you have to pay a mortgage deposit. Since we understand what a struggle saving money can be nowadays, in this article, we are going to provide you with some practical tips, that will hopefully assist you on this journey.

Create a strategy

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First things first, you need a detailed, bulletproof strategy. Understand how much money you need. Is it 5% of the value, or do you want to try to go for more, and pay 10%? How much money do you spend every month? Make a list of all the expenses that you have, and make sure to be accurate. Even though some fees can seem quite insignificant, over the course of a few months, they can turn out to be quite valuable.

Our advice is to make a note every time you spend money. It doesn’t matter if you have just paid the rent, or bought coffee on your way to work. Plus, nowadays, there are multiple apps that you can install on your phone. These are not only more convenient, but they will also notify you when you reach your budget limit.

How much money do you need?

You can always ask a mortgage broker for help, explain your situation to them, and help them understand what kind of property you are looking for. In return, they will provide you with advice and help you understand the different types of mortgage you can apply for. There’s a high chance you can find a mortgage broker in your location through a quick search. If you live in Canada, you can check this agency that services the Toronto area.

Also, don’t forget to conduct a small search on your own. You can find the list of all the details about mortgages on the Think Plutus website, or you can read other people’s comments about their experience with the whole process of purchasing a property. The bottom line is – the more information you gather, the better.

Cut back on all the treats

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Yes, we know, you probably need that morning Starbucks or your favorite meal from the fast-food restaurant, but these are initial expenses that you have to eliminate. We understand that this is easier said than done, but we are certain that if you were to calculate how much money you spend on these small luxuries, you would be surprised.

Naturally, you also have to calculate how much money you need to put down for the mortgage deposit. This can turn out to be quite a complex task, so you might need some help.

It goes without saying that you should cut out cigarettes, alcohol, and eating out at a fancy restaurant once a week. Instead, you can brew coffee and prepare lunch at home and bring it with you to work. As an alternative to eating out, going to the bar or even cinema, you can organize a gathering at your home, prepare some healthy meals, and have fun with your friends.

Reduce bills

Without a doubt, this is the biggest expense that you have on a monthly basis, and there is no way for you to completely eliminate it, but you can try to reduce it a bit. For example, you can try to use less energy by switching to lower tariffs. Moreover, canceling a TV satellite and cable bill is the most efficient way to save money.

Do you really need hundreds of channels? Surely you only watch a few of them, over and over. You can cancel your subscription and sign up for the basic plan. Clearly, we are not saying that you cannot watch TV ever again, but instead of paying this expense, you can sign up for any of the multiple streaming services. These are not only significantly cheaper, but they will provide you with endless entertainment and content.

Furthermore, if you believe that you are overpaying the rent, maybe it is time to move. If you are living in a large apartment, you can find a roommate and split the cost, or find a smaller place to live for a while. As a last resort, you can always move back in with your family, just until you save enough money to buy the property.

Earn some additional cash

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The beauty of the Internet is that it provides us with opportunities to easily find a part-time job that we can do from our home. Think about the skills you possess and how you can teach them to others. There are numerous freelancer websites where you can find people you can tutor. You can help them acquire a language you are fluent in, or on the other hand, you can organize cooking classes or instrument lessons. When it comes to this, the sky is the limit literally.

If you believe that you do not have enough time to dedicate yourself to another job, you can always sell some of your stuff. Yes, we know how this sounds, but think about it. Surely, you have some clothes that have been in the back of your closet that you haven’t worn for months or maybe even years. Why not sell them online? You can either create a profile on social media account, or if you want to get rid of those things quickly, you can simply join an online community, and you will find buyers in no time.