A deposit could mean thousands, if not tens of thousands of pounds. However, saving for a first home is easier than you think.

According to government data, the average cost of a home in the Scotland is £191,941* As a first-time buyer, the minimum you can pay for a deposit is 5%, which can still add up to a big chunk of money. After all, 5% of £191,941 is £9,597.05.

That can feel like a big hurdle to jump, but there are things you can do to make it easier.

1. Budget wisely, controlling your income against your outgoings can help you keep on top of your finances and discover where you can make cutbacks to help save towards your deposit. If you need help managing your finances, you can use our budget template within the Home Buying App.

2. Making cutbacks is the easiest way to save is to make sure you’re not overpaying on your gas, electric and various insurances. However, with energy bills rising fast, it’s recommended that you stick with your current provider rather than switching. Many suppliers are no longer taking on new customers, and you may not actually save any money by changing providers. Despite this, there are still several ways you can save:

  • Cancel any unnecessary subscriptions and memberships
  • Switch broadband/mobile phone providers
  • Look for cheaper insurance deals
  • Shop smartly for your groceries and plan your meals in advance
  • Government schemes

3. The government has introduced several different Help to Buy schemes aimed at those struggling to get to where they want to be on the property ladder:

  • First homes scheme – If you are a first-time buyer and interested in a new build, developers in your area may offer you a 30% discount on your first home. This can increase to as much as 50%, if you meet the criteria.
  • Lifetime ISA – If you’re a first-time buyer, the Lifetime ISA acts as a savings account with a few added benefits. You can pay up to £4,000 each year into your account and receive a 25% bonus (£1,000 maximum) from the government.
  • New schemes do come out from time to time which often benefit first time buyers the most.

4. The bank of Mum and Dad
If your parents are willing to help you financially, just be aware that there’s a set procedure to follow, as this money has to be officially granted as a gifted deposit.

Your parents will need to write a letter detailing how much money they will be gifting, stating that this amount does not need to be repaid. Read the full blog on this topic here.

Buyings Costs

1. Legal costs

You’ll need a solicitor or licensed conveyancer to carry out all the legal work when buying and selling your home.

  • Legal fees are typically £850-£1,500 including VAT at 20%.
  • Your solicitor will also perform local searches, which will cost around £250-£300, to check whether there are any local plans or problems
  • There will also be an electronic transfer fee which usually costs £40-£50. This covers the lender's cost of transferring the mortgage money from the lender to the solicitor
  • LBTT or Stamp duty as it is known in England is a transaction Tax which is payable to HMRC via your solicitor at the time of the purchase. The amount you pay will is dependent on your personal situation, and the value of the property in questions.

There may be other fees to consider, please speak with a qualified solicitor to understand all of the costs involved.

2. Mortgage fees

Mortgages cost more than your monthly repayments, you need to factor in the other fees into your calculations.

These might include:

  • Broker fee of £495-£995
  • Arrangement fee (payable to the mortgage lender) of up to £2,000, and a mortgage valuation fee (£150 or more). This is usually not applicable in Scotland as the mortgage lender will always look to try and use the Home Report.
  • Where possible its best to pay these upfront rather than adding them to your mortgage, otherwise you’ll be paying interest on them for the life of the mortgage. But you should check whether booking and arrangement fees are refundable if the mortgage doesn’t go ahead.

If not, it may be possible to request these are added to the mortgage and then to pay them once the application has been approved and is proceeding.

Talk to a mortgage adviser

A mortgage adviser will be able to explain all the options available to you, looking at your income and outgoings to establish how much you can afford to borrow and how much you need to save.

Please don’t hesitate to book your no obligation consultation with us if you are considering buying your first house or moving home.

For more information on buying or moving home download the homebuying app using the broker code “rettie”.

GET IN TOUCH TODAY with our Mortgage and Protection Team to organise a no obligation consultation.

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Rettie Financial Services Ltd is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.

Rettie Financial Services Ltd. Registered Office Address: Deuchrie, Dunbar, East Lothian, United Kingdom, EH42 1TG. Registered in Scotland Number: SC711925.

For insurance business we offer products from a choice of insurers.

Your home may be repossessed if you do not keep up repayments on your mortgage.

You may have to pay an early repayment charge to your existing lender if you remortgage.

There is no guarantee that it will be possible to arrange continuous letting of your property, nor that rental income will be sufficient to meet the cost of your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.

The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.