Buying your first property is a huge step, but you should never attempt it without a solid amount of cash behind you. You want as large a deposit as possible to put down on it, for huge number of reasons. From simply giving you more choice, to granting you greater financial flexibility, it’s just good sense.
I know it’s very easy to turn around and say ‘you should get a big deposit together’, but it will benefit you massively in the future. Here’s why that is.
You Own More of Your Home
First off, there’s the biggest reason to pay as much of your down payment as possible; it means you own more of your property. When you make the jump from renting to owning, it can be a big difference, and just knowing that you own a higher percentage of your home is a great thing. It’s yours, almost entirely yours! The higher percentage you own starting out, the sooner you can think about upgrading too!
You Get More Choice
Having more savings and a bigger pot for your down payment basically means you’ve got infinitely more choice when it comes to what property you end up buying. You could max out, and go for the biggest, lengthiest mortgage on an expensive house, or go for paying for the majority of a smaller house, it’s up to you.
Having a larger amount of capital at this point essentially makes you more flexible than most first time buyers, and will mean you can call the shots a lot more, and find the kind of property that’ll most suit you and your needs, which is really what this is all about.
You Can Pay Your Mortgage off Quicker
If you pay a bigger percentage of the property as a down payment, which means you’ll own the home outright much sooner than if you’d gone for a property where you only had ten percent. That means you could be dodging tens of thousands in mortgage interest payments, while having more disposable income at the time. Win-win, right?
There’s loads of other tricks to help you pay your mortgage off faster too, but remember, try and get a mortgage that allows you to pay it off quicker, as some don’t.
Mortgages that run on for years and years will inevitably cost you easily tens of thousands in mortgage interest, so it just makes sense to get it paid off as quickly as you possibly can, leaving you owning a property outright, with more free income and greater flexibility.
It’s An Investment
Obviously! Your property is a major investment for you, all the money you sink into it is eventually going to come back when you upgrade or move on.
Being able to put as much down initially, or pay for as a high a percentage as you can really just makes good sense. When it comes to the biggest investment you’re ever going to make, it really should be all or nothing.