Saving up for a down payment is critical to convincing lenders you are able to afford the home of your dreams. Knowing this and actually putting it into action can be difficult. As so many people are recovering from the economical and financial implications of the pandemic, it can feel downright impossible to save enough for a sizable down payment. The good news is that there are ways to bolster your savings account without having to move back in with your parents.
Start with Debt
Before you can build your savings account, you have to know what you’re working with. Pay off all your credit card debts first and foremost. Not only will this reflect well on your credit, but it will allow you to see exactly how much money you have and how much you need to save.
Wants Vs. Needs
Before you can begin, you have to sort out which expenditures are absolutely necessary and which are just nice to have. Big trips, new vehicles, or designer bags are all great to have, but will cut into your savings substantially. Sort out what “wants” can wait until after you are in your home.
Less is More
When you are of the mind to save up thousands of dollars, you have to start living within, and even below, your means. Do you really need four cars for your family, and their subsequent car payments? How often are you eating out? Is it necessary to be signed up for all of those monthly subscription boxes? Enacting small changes to pare down your material goods will actually help you learn to live with less, and ultimately save more.
Get a Side Hustle
Whether you start selling your crochet or pick up a part-time gig at the local coffee shop, that extra income will go a long way to bolstering your savings account. Just make sure to put your earnings away as soon as you get them so you aren’t tempted to spend.
Work with the System
In some cases, you may be able to access programs and products tailored to your unique situation. For example, the Government of Canada’s Home Buyers’ Plan gives first-time home buyers the ability to withdraw up to $35,000 from their RRSP, tax-free. There are even products for new Canadians and those who have struggled with bankruptcy in the past.
The best way to access these mortgage products is to work with a knowledgeable mortgage broker like the ones on our team at Source Mortgage! Give us a call today to get started.