A house deposit is what the majority of us save hard for, for many years and some will be better at this than others.
With property deposits and the fees included in buying a property in Dubai at the moment being at around 22% of the property value, it’s a great time to buy.
Here are our tips on how to save for your property deposit:
Speak to a mortgage consultant
It may seem a bit early, however, having a chat with an experienced mortgage advisor in Dubai will put you in great stead to start saving.
A mortgage consultant can break down the costs involved in buying your first home and can talk you through the type of mortgage you are eligible for. You can also use a mortgage calculator to work out your monthly repayments and get yourself organised and make sure you are saving enough money for the home you desire - you may even get a nice surprise and find out it’s less than you initially thought.
Set up a savings account
This may sound obvious and you may already have a savings account, but it’s a good idea to set up a separate account solely for your house deposit. This way, you don’t find yourself dipping in when you find you're a little short on cash.
As soon as your salary hits your account, move your deposit money straight into your savings account and completely forget that it’s there. It’s not spendable, so don’t dwell on it. Even better - set up a direct debit, so the money will automatically be deposited without you having to see it and give it a second thought.
Evaluate your outgoings
Your monthly outgoings that you don’t give a second thought to is a very good place to start when saving! Write down exactly what you need to spend to survive each month and put emphasis on ‘need’. Things such as rent, car payments, fuel, gym memberships, phone bill, utility bills, pets, food shopping are all essentials. However, we like to treat ourselves and eat out, get takeaways, buy that pair of shoes you’ve been eyeing up in the shop window, your friend’s birthday brunch and, of course, the coffee you buy every morning - these are not ‘need’ these are ‘want’
Now, roughly calculate what you need to spend V’s what you do spend each month and you will be surprised at how much your ‘want’ list costs - often creeping up to the same amount as your ‘need’s’ list. It’s time to cut back on those designer clothes, brunches, coffees and takeaways.
Once you get your spending under control, you will feel much better about saving for your deposit and can treat yourself every now and then knowing that you have it in hand.
Reduce your Rent
Your rent is probably the most expensive outgoing you have. It is worth having a think about whether you can downsize or move to a different area. Here you need to think you’re taking a step back to take many more forward.
You must look into this option thoroughly before making any decision as you need to factor in the cost of moving. Also, timing is key - you don’t want to be breaking a contract half way through and paying penalty fees. This is a decision to be made well in advance.
Deal with your debt
Get your debt cleared as soon as possible. It may mean not saving for a couple of months but you will be setting yourself up to save more and not over complicate the process by having to think about extra debt to clear. This will also help at the point you do come to take a mortgage.
Before you rush off to the bank to clear your debts - be aware that there may be fees to do so depending on how much of your debt is left to clear. If you have more than one debt, start tackling them one by one. Once you’re in the clear, you will have a whole new level of excitement to save for your house deposit.