Buying a home can be the single largest investment that most of us will make; this can also make it a rather daunting prospect if you’re trying to save for a down payment and you still have to pay rent.
Your first step in buying your own home is to look around at what’s available and figure out what size of down payment that you’ll need to accumulate to reach your goal. You can break your total over an extended period of time and have your bank automatically take payments from your account. In this way, you don’t even have to think about the payments at all. They’re simply debited each and every month, and deposited into a savings account of your choice. At times a TFSA has a higher interest rate than a regular savings account, so check out your options.
Keeping it reasonable
A mortgage can mean a hefty monthly payment, and it doesn’t include taxes, utilities, and maintenance. All of these things should be kept in mind when considering how much house you can afford. It’s true that, especially if you’re a couple buying their first home and considering growing your family, you will need more space at some point, but don’t buy more house than you’ll ever need. The tendency to “keep up with the Joneses” will sidetrack those who aren’t careful. If you’re trying to save for a down payment, you’ll reach your goal sooner by keeping your total home cost low.
At times saving for your mortgage will mean having to deny yourself in other areas that you may have enjoyed previously. Travel might not be an option, or regular dining out at restaurants. You may have to stretch your wardrobe to last longer than it has previously, or reduce your cell phone bill. Whatever needs to be done, make sure that you keep your end goal in sight. These are temporary measures, and ultimately the result will be the purchase of a place to call your own.
Bank interest rates change so keeping an eye on yours might mean that your savings grow faster than you’d anticipated. Even a quick online search can help to bring up several different options depending on your needs. You can sometimes find higher interest rates if you’re willing to “lock” your money in for a predetermined period of time.
Rent your extra space
If you’re currently renting, is there an option to sublet a room in your home? If so, consider having a roommate help to pay the bills and allow your savings to grow even faster. You could also consider a renter once you’ve purchased your home; this is often most convenient when there’s a finished basement or bonus room above a garage, but many people make this work in a variety of ways.
It often involves big numbers, but don’t be put off by your first home purchase. Where there’s a will, there’s a way, and home ownership can be just around the corner.