These saving tips for first-time buyers are essential. So please do give them some consideration as you plan for your property journey.
Consider the safety of your savings:
Losing your money is of course never a good thing so you must always ensure your money is as safe as you want it to be.Different saving products have different regulations which give you some degree of safety. As long as your money is deposited in a UK bank or building society regulated by the FCA then you have protection up to £85,000 under the financial services compensation scheme. If you have more than £85,000 then it’s a good idea to spread it amongst other institutions.
Credit unions or building societies usually offer better rates: For some reason, the rates at credit unions and building societies tend to be higher than high street banks. They are worth a look before you commit to where your savings will be deposited.
Switch after 12 months: Most products will offer an introductory rate which is, of course, used to entice new customers but this rates usually drop after 12 months and become less competitive in comparison to products in the market. It’s best to continuously switch providers whenever an introductory period has finished.
Protect your savings from the taxman: This savings tip especially applies if you have a large amount of savings. It is worth maximising your ISA allowance as the returns are tax-free.
Benefit from friends and family:
so let’s say you pay tax at a higher rate but your spouse or close family don’t. It is a savings tip to put your savings in their name rather than pay tax on your interest at a higher rate. There is just the little problem of inheritance tax if this person was to, unfortunately, pass away.
Consider Innovative ISAs: Innovative ISA products are fairly new but they do have some interesting things going on. You are now able to invest in properties almost in the same fashion a buy t let investor would have invested without needing the huge amount of capital by investing in Innovative ISAs such as Property ISA.There are of course other more conventional product such as the Governments help to buy ISA.
Be conscious on how you can reduce your mortgage deposit: As a First-time buyer you must research all the Mortgage schemes available so you know what the minimum savings target you need to reach is and how you can qualify and take advantage of Mortgage schemes such as the help to buy ISA or Help to buy equity loan
Don’t get lost in jargons: As a first-time buyer, it is important you understand exactly what you are signing into. Take a look at our savings Jargons buster here and of course, while you are at it, It might be worth opening our Mortgage jargon buster in a new tab. I mean…after all you are saving for a Mortgage right?