Are you looking for ways to build up a house deposit? When you're house-hunting, a larger deposit means that you can secure more favorable mortgage terms. This can save you thousands in interest. It also means that you have a cushion if house prices fall (you don't want to owe more than your house is worth). So try these ways to build up a house deposit …
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1. Small Business
One of the best ways to build up a house deposit is to start up a small business in addition to your main job, and dedicate all profits to your house fund. It would be difficult to save while covering all your costs if it were your only source of income, but easier if you have your main job. You could start a pet-sitting service, sell crafts on Etsy, or clean cars.
2. Wedding
I'm not suggesting that you should get married just to score some cash. In fact, weddings can drain your cash. But there are two ways in which your wedding can help you out. One is to ask that if people want to buy gifts, they contribute to your deposit fund. But an even better way is to cut your wedding budget right down. You can still have a memorable day for $5k or less. Put the thousands you would have spent on your wedding in your house fund instead.
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3. Windfalls
We don't get many windfalls in our lives, so if you're lucky enough to receive a lump sum, pop it straight in your house fund. If you receive any gifts of cash, an inheritance, or even a win at bingo, don't be tempted to splash out. It could really make a difference to your house deposit, so pay it into your house savings account.
4. Online Sales
Do you have lots of clothes, collectible items, or anything that you could sell online? It could be time to clear out your closet and start raising funds for your future home. Designer clothes and bags are particularly popular (make sure you send them insured and via a signed-for method). You won't make a fortune, but could free up some cash (and you'll have fewer items to take up space in your new home!).
5. House Sharing
As well as making money, cutting your expenses is a good way to find cash for your house fund. Living on your own may be preferable, but it's also more expensive. By sharing an apartment instead, you could free up thousands every year that you'd otherwise spend on rent. Spending a few years with a roommate could be a worthwhile compromise if it means that you can buy a home.
6. Budgeting
Do you spend your cash long before you get around to putting anything into savings? This won't help you get your house. Careful budgeting will. Turn your spending around and once you've paid essential bills, allocate an amount to savings. Only then should you allow yourself an amount for frivolous spends.
7. Prioritising
Finally, buying a house means a lot of compromises and sacrifices, so you'll need to prioritise your spending. Every time you're tempted to spend, think twice. Ask yourself if you really need that coffee or new top. It all adds up. Think of your house, and you may realise you'd rather keep your cash.
It can seem difficult, if not impossible, to build up a decent house deposit. Unless you're very lucky, or have a highly-paid job, you'll need to make some sacrifices. Unfortunately you can't have everything you want. But if your priority is buying your own home, then you'll have to forego new clothes and frequent nights out. Would you prefer to rent or buy?
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