For many first-time homebuyers, that downpayment is one of the big obstacles to home ownership. Saving up cash – especially if you’re paying rent, paying down student loans, and trying to live a life – can be slow and difficult work.
In most cases, you’ll need to save up at least 5% of the purchase price of your home. But there are some programs and tips we can offer to give your downpayment a boost – to get you into your home faster:
1. Home Buyers' Plan (HBP) lets first-time homebuyers withdraw up to $25,000 each (or $50,000 for a couple) tax-free from their RRSPs. You’ll need to pay those funds back, on a repayment plan within 15 years of withdrawal.
2. A Financial Gift - A gift from a parent or blood relative can be used as a downpayment. This can not be a private debt; you’ll need to document in writing that the funds are a gift and you are not required to pay the money back at any time.
3. Start small - If your dream home is out of reach, look for a starter home. Use today’s low interest rates to start paying down your first mortgage, then watch for the opportunity to get the home of your dreams – using the equity and credit rating you’ve been building!
4. Do a cash flow analysis – download this free excel spreadsheet – sometimes all it takes is seeing and tracking your spending to free enough money to quickly save up for your down payment.
5. $0 Down Mortgage options – with a zero down mortgage you must have great credit and very little debt. It is a very good option for those with high earning potential and good spending habits, who just haven’t saved enough for their downpayment.
Talk to me today to ensure that you get off on the right foot in your home buying journey!