Saving For A Downpayment
Saving for a down payment is one of those things most of us have to/had to do in our lives. You have created your life and/or family and are looking to get into your first home. This tips will help you with saving some money for your down payment.
Determine how much you need to save
The current minimum needed for a down payment of a home less than $500,000 in Canada is 5% of the purchase price. For homes between $500,000 and $999,999 the minimum down payment is 5% on the first $500,000 and 10% for any of the amount over it. Finally if you purchase price is $1,000,000 or more, the minimum down payment is 20%.
You can try out my handy Mortgage Calculator to input some prices to determine what you think would be an affordable mortgage payment for you for a general idea of your price range in homes.
Set a timeline
Once you have a timeline and an amount from there you can do some simple math to determine how much you need to put away weekly/monthly to save. For example, if you are wanting to save $20,000 (5% of $400,000) and are hoping to do it in 3 years you would need to put away $555 a month or $256 bi-weekly.
Automate your savings
Now that you have the amount you want to save per month in mind, set up automatic transfers with you bank in to a savings account. If you have specific dates you receive your pay you can have them set up to take out that day or the next.
Extras add up
Receiving a bonus at work or a little extra money in your birthday card? Put this money into the savings and it will quickly add up. Just as the little things like eating out and cab rides add up to take funds out of your account, saving on these things will encourage growth in your bank account.