Everyone needs a place to call home. It’s our base. It’s the foundation upon which we build our lives. It defines our sense of community and the satisfaction of participation. But what is the price tag that comes with owning your own home? How do we secure the money to become homeowners? How do we save money to buy a home?
It is not always easy saving up a downpayment for a home, especially if you are already paying rent or a mortgage. Coming up with 5%-20% of a purchase price can feel so unattainable when you already have so many other expenses to stay on top of. There are things that you can do to make saving up for a home a much more manageable venture. Here are some ways that you can increase your savings to secure the home of your dreams! These strategies apply to buyers of any age whether you are Millenials, GenX there are ways to get yourself into home ownership.
What Can You Afford
When it comes to purchasing a home, it is very important to understand what you can afford. Speak with your financial advisor or a mortgage specialist to find out how much you can put towards a mortgage payment each month. This number should include the mortgage payment, property taxes, insurance costs, and any condo/homeowner fees. You will want to leave some wiggle room in your budget so that if there are any unexpected expenses such as home maintenance or repairs that arise, that you can still handle them. To increase your affordability, it could be worth looking into Buying a Home with a Friend.
Set Up Your Down Payment Fund
The first step is to know how much you can set aside each month towards your down payment. You can create a fund or an account to put your money into. Next, consult a professional, such as your mortgage specialist or financial advisor; They can help figure out the best way to save or invest your money to build up your down payment. There are several options available, such as Tax-Free Savings Account or RRSPs. Try to make consistent payments into your savings fund. Once you meet your goal, it is time to begin your house-hunting adventures.
Cut Back Where You Can
It is easy to get lost in automatic payments. Sit back and account for all of your monthly expenses. Cancel subscriptions that you do not use, or do not need, or change your monthly plans. Make sure you are getting the best deal that reflects your true needs. You may find yourself saving a couple of hundred dollars each month. Click here for more tips on how to save up for your home.
Resist Temptation
Give yourself some time, it is not realistic that you can save for your down payment in only a few months. There will likely come a time that you will want to dip into your savings and spoil yourself a little. Resist this urge. Instead, put your money somewhere that is not accessible. Pretend that it is not there at all. While it will take time, the benefits that come with having your own home are plentiful.
Securing your down payment may feel like the biggest hurdle you face when it comes to buying your home. While there are many ways of achieving this, the sacrifices you may have to make will pose a challenge. In the end, once you have your key in hand, the rewards are worth it. Reach out to your Real Estate Agent to help in researching strategies. If you don't have one let us know. They can help you with the advantages, limitations of the various approaches you can take. With the proper help, there is no doubt that you will be able to buy the property that is right for you and your family. Then enjoy life as a home-owner!
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