How to Save Money for a Home as a Couple?

Buying your first home as a couple requires planning, downsizing and savings. Walking by a planned route helps you accomplish your home purchase aspirations. If your partner shares the same dream of owning a home within 5 years, plan now. This is because buying a home requires one to qualify for a mortgage. It is the toughest part. 

Even if you apply for a joint mortgage as a couple, you must meet standards. For example- you both should have a regular and decent income.  Additionally, the credit profile should not reveal your indifference towards debts. It may lead to instant rejection. You must pay the debt and optimise your profile before applying. 

Still, income and finances are the critical part of owning a home.  One must save around 20% of their income towards mortgage goals.  However, with continuous cost-of-living challenges, one struggles to do so. The blog lists the best ways to save money as a couple and bridge the difference to your goals.

Easy ways to double up your savings for home purchase

The first thing is to have honest conversations about finances, saving goals, spending habits, debt and budget. It will help you get even with your partner’s finances. Ensuring transparency is the basic requirement to achieve any goal as a couple.

Additionally, knowing the above things may help you conclude.  You may revise your spending habits, and budget pattern and cut expenses accordingly. Here are other ways to save to buy a home as a couple:

1)      Analyse monthly incoming and outgoings

Though it may sound basic, but holds the crust to your home-buying dream. Knowing your finances is one of the best ways to achieve your goals. Analyse your and your partner’s income sources. 

For example, you earn through a regular income, dividends, part-time work or business. Additionally, inheritance money may also help you increase income. 

Similarly, analyse your partner’s income. Next, check your and your partner’s expenses. Check the total crucial expenses you cannot do without- electricity, energy bills, rent, etc. It will help you get the gap between the most important expenses, income, and discretionary expenses.

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2)      Explore the house type and costs

Next, analyse the house type and property price. You can explore the possibilities by basing some parameters like- location, facilities, future resale value, etc. It will help you choose the right property from the return’s perspective. Additionally, analyse the total costs and the best ways to catalyse savings.

 For example, increasing the number of incomes may help you reach your goal faster. Meet the property seller and negotiate for a better deal. Request property visits from the selected or shortlisted properties. It assists one in analysing the property from every perspective like- demand, previous owner history, property legality, etc.

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3)      Prioritise debt payments

 

Entering a mortgage application or owning a house requires minimal liabilities. Individuals with neck-deep debts must sort out a personalised solution. Without reducing debts, you may not get better interest rates or even qualify. If you have multiple debts impacting your goals, clear them. Check the best ways to do so. 

For example- you can pay the high-interest debt first. It implies you must save for debt clearance alongside a mortgage deposit. Individuals with handsome incomes may find it easy. However, emergencies may hamper your goals. For example, if you must repair the water damage, you must spend. It may cost up to £5000-£8000 for 200m/square.

It is a massive expense and may hinder your home-buying goals. However, you don’t have to use your savings. Instead, explore facilities that confirm- no guarantor needed loans, respectively. These loans may help you finance the water damage repair without impacting your home-buying routes. It is helpful for individuals seeking independent finance solutions for short-term needs. 

4)      Stop renting for some time

It may seem like a joke, but it is not. You may not know, but around 65% of your earnings goes towards the rent. For example, if you pay £15000 per month, you pay £1,80,000/ year. It is apart from the penalty for the late payment (if your landlord charges). 

Thus, seek ways to save on rental payments. Some individuals may prefer to shift to more affordable rentals. Alternatively, check whether you can live with your parents or relatives unless you save enough for your home.

 It will help you eliminate the rental costs. Instead, you can save £1,80,000 towards the home purchase. If not the exact amount, by shifting with your friend, split the cost. Splitting the costs with someone else makes you pay just half the rental costs. For example, you pay just £90000/year instead of £1,80,000. You can save the rest £90000 towards the deposit and other home-purchase-related things.

Bottom line

When home prices increase, saving for a house seems almost impossible. However, with careful guidance, knowledge and a savings plan, it is possible. Analyse your finances, expenses, savings and income. Align it with your partner. 

It will help you understand the shortcomings. You can save as a partner by making some compromises and strengthening investments. The sooner you save, the sooner you may achieve the goal.

Description:  If you want to buy a home as a couple, the blog may help. It lists some ways to save money realistically and achieve the goal.

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