If you are buying your first home then you will need to have a deposit ready. A deposit is a lump sum of money that you can put towards the cost of the home. This serves a selection of functions for the mortgage company. They will want to see that you are capable of saving money up as that will show that you are capable of making regular monthly mortgage repayments. They will also want to only lend you a percentage of the value of the home. This is because if they have to sell the home, due to you defaulting on mortgage payments, they will be able to make more money back than if they had lent the full value of it. There is also a risk that the value of the property would drop in the short term and so it could be difficult to make back the money that was borrowed.
Having a deposit is also very good for the borrower as well. The more money that you can save up the less you may have to borrow. If you can have a big deposit, then it may mean that you will be able to borrow less, to afford the home that you want and this will mean that it will be cheaper as you will not have to pay so many loan costs. Some people would rather borrow more so that they can get a higher value home. They would then need a bigger deposit in order to borrow this larger amount of money. Either way, having a bigger deposit is certainly an advantage.
Saving for a deposit though, can be hard work. If you already save each month, then it should be easy to continue doing so, but there are people who want to save more and those that save nothing or in fact spend more than they earn. In these situations it is more difficult to find a way to build up enough savings for a deposit. An additional problem is that as time passes, house prices go up and so you will need a larger deposit to buy the home that you want. Therefore the quicker you can save up, the better.
It can be best approaching it from two angles. It is good to see whether you can earn more money and therefore you will have more to put away. Also it is good looking at whether you can spend less money, then you will have even ore to save. It will not be easy, it will take time and you may have to cut back on things that you like. However, if you are really set on your goal of having your own home, then you should feel motivated to make some changes.
To earn more money you could either look at your main job or consider another job. With your main job you may be able to get a pay rise, work more hours, look for a promotion opportunity or even apply for a new main job that pays more. You could also look for addition weekend or evening work, perhaps outside of the home, you could look for freelance work, online work or even sell things that you make. There are a lot of opportunities out there to make money as long as you have the time to try them.
Saving money also has different options. You could compare prices of everything you buy and look for cheaper options. This can be anything from insurance to food. You could also buy less items as well. It is worth taking a look at everything that you normally buy and seeing whether you can cope without buying so much. Every time you buy something it is good to think about whether you really need it or whether it would be better for the money to go into your deposit fund. You could even think about asking friends and family to contribute rather than giving you gifts when it is your birthday or Christmas. If you put in a lot of effort towards saving then it will be really worth it because you will either be able to get a larger home or be able to get it more quickly or be able to get a lower mortgage.