Tips For Saving For A Down Payment
Updated: May 12, 2021
As housing prices increase, people are finding it more and more difficult to save for a down payment. And while it can be difficult to accomplish, it is important to remember that it is attainable. If you are looking at purchasing a $300,000 home, you will need a minimum down payment of $15,000. Keep in mind that the minimum down payment for a house you are going to live in all or part of the time is 5%.
1. Speak to a qualified mortgage agent to come up with a plan!
2. Pay off high interest debt. It is difficult to start saving if you are continually paying off interest. That money you are paying in interest can eventually go into savings. Side note if you have too much debt consumer debt, you might not qualify for a mortgage even if you have enough for a down payment.
3. Know your down payment goals. It is easier to achieve something if you know what you are after. Try to be specific in knowing the amount you would like to save and have an end date of when you would like to have it saved. This will help keep you accountable. Make sure that your goal is attainable so you do not become discouraged.
4. Create a budget. From that budget transfer a set amount every paycheck that relates to your overall goal for your down payment amount and end date to a separate account. Once you have the overall amount and end date you can determine, the amount you need to transfer each month to achieve your goal.
5. Lower your expenses. Take a look at your expenses each month and determine which expenses you could do without. If you have cable and a streaming service, maybe you decide you only need one of them. Maybe you are paying for a gym membership and you decide that you can keep just as active and healthy on your own. Put aside the money you are now saving and add it to your separate down payment account.
6. Get a second job. Remember that this is not permanent. You have a goal in mind and any additional income will allow you to achieve that goal.
7. Borrow from RRSP’s. You have the ability to access up to $35,000 from you RRSP’s in order to purchase a home. This withdrawal is not taxable as long as you pay it back within your 15 year window.