Homeowner, 25, on how she saved £36,000 mortgage deposit – including £1,000 per year boost
Ms Hull has achieved what many millennials feel they can only dream of; buying her own home thanks to her frugal spending habits. “I’ve always been a good saver,” she commented, noting that the savings she used to pay the £36,000 deposit had been accumulating since she was in university. “As I worked in a pub, it was easy to take on more evening shifts and weekend shifts, other than when I had a lot of uni work to get on with. If you have a job and a student loan at uni, then ideally you should be putting some of that money away each month.”
Now working at Liberty Marketing, Ms Hull’s plans to save have taken a more strategic route recently.
“For the past two years, I had a direct debit for £250 going into a fixed account which I couldn’t touch. As well as that, I was ensuring that I was adding in £4,000 every year to my [Lifetime] ISA to benefit from the £1,000 from the government each year.”
Lifetime ISAs were first launched in 2017, creating a tax-free investment or saving option for anyone aged 18-39 with the aim of helping them save for retirement or, as in Ms Hull’s case, to buy their first home.
“The Lifetime ISA is definitely worth doing. With interest rates so awful at the moment, it’s quite hard to get any sort of ‘thank you’ boost from the banks.
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“With this, you put in a maximum of £4000 a year and then the government gives you 25 percent back,” she commented.
Ms Hull also attributes her milestone purchase to the help she received from a mortgage broker at Pure Property Finance.
“I have no idea about anything to do with mortgages so I left it completely in their hands to find the best mortgage for me and my circumstances,” she said.
“I know people that’ve really struggled with getting mortgages this year that haven’t had deposits of around 20 percent, but thankfully mine was higher than that so there were no obstacles on that front.”
Ms Hull also shared her top tips for potential first-time buyers trying to save up for their dream home:
“Take advantage of things like Top Cashback and Quidco. You only get a small amount back for each but these things really do add up!
“If you ever come into any extra money that isn’t your wages, then put it to one side to save. You’re not used to having it every month so you shouldn’t really use it to go on a spending spree.
“A fixed account is good too, it means that you can’t touch the money at all. The only problem is the low interest fees at the moment, some of them may only pay out 0.5 percent after the year, or two years, that you decide to open the bank account for, in which case you need to decide if that extra £20/30 at the end of the two years is really worth it.”
And once you’ve started the property buying process, Ms Hull suggested people make sure they have money ready for the little things not included in the main price tag like lawyers and furniture:
“My only problem was using a lawyer that was pretty slow and kept the chain held up – they didn’t ask for my money until the day of completion and annoyingly I had to ring my bank to approve such a large amount of cash on that day. Always make sure you’re able to send the money over a few days before just to give it time to go through!
“Use zero percent finance on big purchases like sofas and electronics, so that you don’t need to pay it all. I didn’t do this and my sofas were around £2,000, which I paid outright, but it meant that I lacked funds for other purchases when I needed it.”
So, what does the future hold for this senior PR executive? More savings to be exact.
“The only thing for me is to carry on saving so that when I want to take a big holiday or do something amazing, my finances aren’t going to be the thing that stops me. I still save into my savings accounts just so that I always have something should I need it.
“I’ve put a load of money into a Hargreaves Lansdown account and over the past few months I’ve watched it grow. Obviously this is a big risk, but adding it while the stock market was lower than normal really helped as there was no where for it to go but up. I’ve grown my funds about 11 percent since putting it in, and I’m going to leave it in there until I need it for a bigger house or something urgent comes up. Ideally, I do want to keep adding to this over time but we’ll see.
“I’ll keep saving my work bonuses and any other extra money that I come into that isn’t my normal wage, as well as continuing with the likes of Top Cashback and other money saving sites.”
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