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Trying to get a foot on the property ladder can be a frustrating process. Rented accommodation is often expensive and it's difficult to have spare cash to put aside. There are no easy answers. And for those without an affluent parent or kindly benefactor to give them a helping hand, obtaining a deposit can take a few years to save. Most people buying a property need to put down a deposit. There are far better deals available for those who can put down at least 10% of its value. Trying to get a foot on the property ladder can be a frustrating process. Rented accommodation is often expensive and it's difficult to have spare cash to put aside. |
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There are no easy answers. And for those without an affluent parent or kindly benefactor to give them a helping hand, obtaining a deposit can take a few years to save. Most people buying a property need to put down a deposit. There are far better deals available for those who can put down at least 10% of its value. Even if you decide to go for a 100% deal, you will still need to have a sufficiently large pot of savings to cope with all the other costs linked to buying a first home. The best way of saving is to put money aside regularly into an account that offers a good rate of interest and offers relative ease of access. Although you will not be able to withdraw cash for a set period of, say 50 days, some notice accounts can be among the best in the market You need to keep the money in cash. One option is a mini-cash ISA, as you can save up to £3,000 in this and not pay any tax. It makes sense to avoid stocks and shares ISAs: these are far less flexible and more of a gamble. You could end up with far less than you put in. Who offers the best rate of interest? This varies constantly. In general you can steer well clear of the high street banks for a good deal. Internet banks are a different case, however, and mutual building societies are also well worth checking out. Can I borrow for my deposit? Some people will borrow money to use toward their deposit. But banks will generally not agree to a personal loan for this purpose - it is up to you to say if it is for something else. But when you first move in you are likely to be faced with many other expenses and the additional burden of a loan can create serious problems. |
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Saving for a Deposit |
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