Most buyers need a home loan to purchase a property… but they must first save up the 10% down payment deposit. Here are a few hints and tips to help you save for a home.
Take control of your finances
The first step to saving for your property in Malta is to have all the facts. Take an honest look at your finances and spending habits to establish how much, on average, you are saving each month. That amount might be lower than you expect if you are not actively saving.
To help you stay in control of your finances, it is a good idea to keep track of things regularly. Even a simple spreadsheet, updated monthly with your income and outgoing payments, will give you an overview of your spending and help you set realistic savings goals. With this information at your disposal, you can make mindful choices about how and where you spend going forward.
Look at your mortgage options
You will want to speak to your bank about what size mortgage you would be able to get. The bank will take your age, income and any unrelated debts or financial commitments into consideration when calculating how much they are willing to lend you.
Remember, this does not mean the bank will just hand that amount over when it’s time to purchase. That final decision is only taken when the bank’s architect has valued the property in question and a sanction letter has been issued.
This is also a good time to review your banking options. Though it might be tempting to stick with the bank you already use because it is convenient, other banks might offer loans at better rates or with additional features that appeal to you. Consider all the available options carefully and choose the one that suits your needs.
Set a goal and stick to it
So you’ve gone to the bank and you have a clear picture of your monthly outgoings. The next step is to set a goal for yourself. For many people, saving the full 10% of a property deposit is a daunting prospect. After all, that is no small amount!
Instead of going for the full amount, you can choose to set smaller, more achievable goals. Armed with an understanding of your spending and saving, you can work out how long it should take to reach your target. Be conservative in your estimate and don’t be too hard on yourself if it takes an extra month or two to get there. Unexpected expenses happen to everyone and personal circumstances can change. Just remember your goal and keep working towards it.
Tips to help you save more
Cutting down on trips to the cinema or fancy restaurants are pretty obvious ways to save some cash but there are other things you can do to get you closer to your saving goal.
Take a look at the automatic payments or standing orders leaving your accounts for services or products. If you can do without that magazine subscription or find that you aren’t using your Spotify Premium account much, consider cancelling them. You can always restart the services later if you find you miss them.
Similarly, review the services you want to retain. Your mobile phone service, for instance. Are you using up your monthly data allowance regularly? If not, a plan with a lower data cap and a cheaper price could do the trick. Subscription services like Netflix usually offer price tiers and choosing the lower ones may not make all that much difference to the quality of service but will help you save a bundle every month.
Standing orders can be a helpful saving tool in themselves. Set up a savings account and a standing order to deposit a certain amount into it each month. Crucially, leave the associated bank card in a safe place (i.e. not your wallet so you aren’t tempted to dip in!).
Prioritise paying off your debts. If you have any loans or credit cards, aim to clear those as quickly as you can. Accruing interest on debts only makes paying them off that much harder, so getting those out of the way will make it easier to meet your saving goals.
Taking the next step with RE/MAX
Whether it’s your first time buying a property or you have been through the process before, knowing how to save money is a useful skill. Once you have reached your saving goal, get in touch with RE/MAX to find your perfect property.