When it comes to making a down payment on your first home, a good way to increase your chances for a mortgage is by having a large down payment ready for the house. This shows that you’re serious about your investment and the banks can be serious about it as well. Here are some helpful tips when it comes to saving for a Down Payment:
Prioritize
One of the first things you must do is to make sure saving for your future home is a top priority. Are you in need of a new car or do you think it will last longer, possibly for a few more years. Can you cut back on some of the times you eat out? Can you eat more meals at your home? Finding some ways to cut back on your spending and putting that money into your savings account is a huge step. Creating a budget is the first step and to stick by your budget.
Pay Off Your Credit Cards
The interest you are paying on your credit card will be far more than the return on any TFSA or RRSP you can hope to have. It is important to pay off your credit card bills as fast as you can so that you can start putting more money into your savings.
Save More Money from Work
Any time you get a raise, bonus, extra commission, tax refund etc. put this money into a separate savings account. Don’t touch this money! You were fine living without it in the first place, so you should be fine putting it away.
Utilize a TFSA
This is a great place to save for your down payment on your first home. The money can grow tax free without being hit with income tax. You can also talk to a financial planner to help with this.
Borrow from Your RRSP
If you already have money in your RRSP, you can borrow up to $25,000 as a down payment to buy your first home. If you don’t have an RRSP, it may be time to set one up. It’s a good way to save money while at the same time getting a tax credit. You do have to pay the money back within 15 years. If you are looking for other ways to help save for a down payment, talk to a mortgage specialist today.
