Unless you’ve just won the lottery or are an extremely high earner, it seems there’s never a right time for buying a new home. I’m sure the view is just fine from the upper rungs of the property ladder. But getting to that first rung definitely involves a bit of a strenuous jump. So how do you go about getting there? The following are just some of the ways I managed to climb aboard the good ship ‘homeowner’.
As a young professional, I’ve witnessed many feats of commercial daring among my colleagues. Some people just seem to get success without even busting their gut in doing so. Or at least that’s how it looks from the outside. In fact what my more successful colleagues often do is set themselves a challenge, and go after it with the tenacity of a hungry dog, teeth bared and totally committed. It’s all quite simple. If you totally commit, you will either succeed, or you will fail honourably.
Step 2: honour your commitment
Getting your home loan deposit together isn’t rocket science. But it does involve sacrifices. So, get a financial inventory together. Paying for a video streaming service you never use? Bin it. Paying for a gym contract you kind of mean to use but never get round to? Cancel it right now. Drink too many cans of soda? Switch to tap water. You get the picture. It’s not easy, I grant you. But when your home loan acorn starts growing into a little baby oak tree, you will start feeling a whole lot better.
Step 3: renegotiate your outgoings
Check your utilities provider against its competitors. Any saving is a saving, even if it’s only a few coins every month. It all adds up! Likewise, your credit card. Finance companies are always looking for new custom. And while credit card debt is rising, it doesn’t mean that any of us should needlessly be adding to the stats. There are lots of introductory offers, and even a merry band of obsessives who treat points accumulation like it was a full-time occupation. Phone contracts are another biggie – so be prepared to haggle. It worked for me!
Step 4: watch where you put your savings
Once upon a time, in a land far far away, you could get over 10% interest on a savings account. Actually it wasn’t in a land far away at all. It was in the USA in around 1980. Makes today’s 0.01% seem a little slim, no?
Luckily, saving for a home loan deposit isn’t a long term thing. So while your money won’t earn interest at a rate to match inflation, we’re talking very small amounts. So use a good savings account with a reputable bank. Don’t put your savings into any scheme that involves risk – because the whole point of risk is that you agree to put up with the shortfall if the investment doesn’t bear fruit. Not what you want to do with your deposit cash. And don’t stuff your banknotes into a mattress – a bank is a much safer place.
Iterate your strategy as you go
It’s fine to have plan. But there may be bumps in the road. So make sure that – while you are 100% committed to getting your home loan together in 12 months, you will also need to be resilient, flexible and ready to bounce back should there be any unforeseen expenses.
And if you can’t manage 12 months, then extend your timescale. But if you do need to do this, just stay committed, keep chipping away, and visualise yourself on the doorstep of your new home – key in hand.