Saving for a down payment because you’re buying a house in Kamloops or Kelowna? While it might feel like a daunting task now, you’re closer than you think. As a Vernon mortgage broker serving home buyers across the Thomson-Okanagan, I’ve put together the top tips my clients have used to realize their dream of buying a house.
Six tips to save for a down payment:
1. Open an automatic savings plan in a separate account
When the money comes out of your account automatically every two weeks or every month, it’ll add up fast and you won’t have a chance to miss it. Be sure it’s heading into an account that is just for your down payment so there won’t be an opportunity to spend your down payment savings on something else.
2. Tap into your RRSPs
Under the First Time Home Buyer’s Plan (HBP), you can use up to $25,000 from your RRSPs for your down payment. There are a few catches and conditions, but if you’ve been contributing regularly to RRSPs for even a few years, both you and your partner could have access to a hefty start on your down payment savings.
3. Pay off credit card debts
When you meet your Kelowna mortgage broker, your credit rating and your chances of qualifying for a mortgage will be better if you have a low debt ratio anyway, so you might as well pay off your credit cards first. Plus, and maybe more importantly, it’s easier to save when you’re not paying heaps of interest. Pay more than the minimum payment on one card and get that card paid off; then do the same for the next and the next until you’re credit card debt-free.
4. Spend less on everyday activities
With a little dedication and creativity you can save big when you choose lower-cost entertainment and dining alternatives. Here are some examples:
- Use the library to borrow books instead of buying them, and to borrow movies instead of going to the theatre.
- Pack a lunch and take coffee from home rather than paying $15-$20 a day on meals out and coffee runs.
- Staycation and try out the touristy activities in your region as day trips rather than forking out big bucks for sandy resorts and flights.
5. Get rid of a vehicle
If you and your spouse can manage the logistics of owning just one car, you can save hundreds every month on insurance, maintenance and car payments.
6. See if your city offers a first-time home buyers loan or grant
Some Canadian cities help low income families become homeowners by offering low-interest down payment loans. In the Okanagan, the Project Build Society is now offering free down payments to qualifying families to help them become home owners. Check out our post on Project Build’s Vernon down payment program.
Saved up enough for a down payment? Now find the mortgage that’s right for you. Vernon mortgage broker Peter Pogue offers low rates, flexible options and more attention than the banks. Now serving home buyers in Kelowna, Kamloops, Penticton and Salmon Arm. Contact Peter today!250-549-3250.