Down-Payment Savings Tips
Ask some what the most daunting part of the road to home ownership is and many will tell you it’s saving the necessary funds for a down-payment. While monthly mortgage payments can seem reasonable enough, finding $25,000.00 or more for a down-payment can seem next to impossible.
We wanted to share a few tips and tricks to help keep you on track of your real estate goals.
Create a separate savings account.
Having a separate savings account will make sure that the funds you do have set aside are not easily used for any other purchases. Putting it into a high interest savings that requires a 24 hour delay to transfer funds to a chequing account will stop you from attempting to access the funds to pay for expensive impulse buys.
Remind yourself that these funds are for your future and the future of your family.
Create a Budget
Make a commitment to saving for your down-payment. It’s not enough to want to save … you actually have to do the work.
Know how much money you have coming in, and how much you pay in bills and expenses. Ensure that you are saving not only for your down-payment, but also setting aside savings for emergencies and rainy days. Without a snapshot of where you stand you can’t make a clear plan of where you want to be.
Make savings automatic.
Did you know that most banks will allow you to set up automatic deposits into your savings account?
Pay day? Have your bank move X% of your income directly into your savings…. And watch your nest egg grow without even having to think about it!
With the holidays just around the corner, ask friends, family and loved ones to skip the holiday sweater that will sit in your closet unused and instead ask for them to gift money towards your down-payment savings. Giving money can sometimes feel tacky or impersonal. Make sure that your loved ones know that you are working towards a specific goal – and they can help you realize your dreams sooner!
Other idea come from Kelsey Pudloski with livable.com. She shares this advice from licensed mortgage broker Sean Cooper:
“One unconventional way I saved was by not traveling a lot. Instead of flying everywhere, I’d just go on vacations throughout Ontario or to Montreal, which is not too far away,” explains Cooper. Another way he racked up savings? “I’m vegetarian, which helped me save money because meat is rather expensive. You don’t have to go completely vegetarian, but cutting out red meat can help you save some decent money — and it’s better for your health.” Cycling, riding public transit or downsizing to a single car are other ways potential homebuyers can put more of their income towards savings, according to Cooper.
At the end of the day, consistency is key. In order to grow your savings, you need to make consistent contributions and limit your expenses.
Visiting a mortgage professional can often be a first step in putting your savings and finances into perspective. The Ottawa 4 You Real Estate team works with some award-winning brokers. If you are on the hunt for a trusted professional, don’t hesitate to reach out.
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