Do you want to own your own home?

Are you tired of renting and helping someone else pay down their mortgage?

Do you want to start building your own equity and experience home ownership?

There comes a time in life when you’ll be ready to take the step and purchase your first home. It’s an exciting time as you start looking at homes and having visions of where you’ll put your furniture, which bedroom will be for the kids and how you’ll set up your patio furniture. All of this excitement can overshadow the reality that in order to buy a home you’re going to need a down payment. For a lot of prospective home owners, the down payment is the hardest part of the home buying puzzle.

In Canada, the minimum down payment varies depending on the purchase price of your home. The below table shows the minimum down payment required:

Purchase price

Minimum down payment required

$500,000 or less

5% of purchase price

$500,000 - $999,999

5% of first $500,000

10% on the amount above $500,000

$1 million+

20% of purchase price

 

The down payment is put towards the price of the home and your mortgage is equal to the remainder. If you put down less than 20% as a down payment, you’ll get what’s called a ‘high ratio’ mortgage and be required to purchase mortgage loan insurance.

Having a down payment is required to purchase a house and that’s why the information in this article is so important. By doing the 7 things below you’ll start making changes to improve your cash flow and improve your financial situation so you’re buying a home sooner than later.

Whatever season of life you’re in, there’s important things you can be doing to help save your money, build your down payment and become a home owner:

  1. Eat at home/make a lunch: The cost of food and fuel seems to be going up consistently. This means the cost to eat at restaurants or grabbing something at the drive thru will add up and cost you more than if you were to eat at home. Food is typically the second largest monthly expense for families, if you can cut down on eating out by preparing and packing a lunch or snacks at home, you’re going to notice BIG savings each month. Example, $15/day, 20 days/month = $300/month.
  2. Carpool or walk when it makes sense: Just like food, the cost of fuel is going up too. Remember when it was a buck a litre and we thought that was expensive?!?! Driving around and going from point A to point B is costing more and more. I don’t recommend going for a ‘Sunday drive’ and just cruising around as it’s going to cost you. Instead, consider carpooling with a colleague to get to work, or pre planning when you leave the house so you make your driving worthwhile. If you have a few places to go, go to all of them on the same trip to cut down on extra driving. When possible and if the weather permits, get around with two feet and a heartbeat. Enjoy the fresh air and move your body. It’s good for you and it saves you money too!
  3. Review your monthly expenses: As you prepare for home ownership it’s going to be really important to have an understanding of your monthly cash flow as it relates to income and expenses. If you haven’t been tracking your spending, set aside some time to review your budget the past three months to see where you’re spending and how much you’re spending. Common categories to organize your expenses in are groceries, rent, bills, fuel, entertainment, personal spending, savings. By reviewing your expenses you’ll see where you’re spending your money. Then it’s important to consider what costs you can reduce or remove to help save money.
  4. Look for free activities and things to do: In every city or town there’s likely some great activities available to the public at no cost. Some examples of these types of activities include your local farmer’s market, walking the trail system, visiting a park with your kids, going for a bike ride or taking your dog for a walk, visiting friends to play cards or board games. Try replacing costly events like going to the movies, eating at a restaurant, going golfing or bowling with some no cost options and you’ll find yourself saving money you can put towards your down payment.
  5. Start a savings fund for a down payment: One of the best things you can do is start a savings fund for your down payment. Putting away money every month, and not touching it, is one of the best ways to support your goal of home ownership. The more you can afford to put away, the sooner you’ll be able to buy a home.
  6. Meet with a financial advisor and make a plan: A financial advisor will be able to talk with you about how much money you’ll need to save each month to make your down payment savings goal. Depending on the price of home you’re looking to buy the amount you save will vary. A financial advisor will be able to spot opportunities to save money, based on your budget, while also giving you a timeline based on your home ownership goals. 
  7. Work with Team Zimmerman to find your home: Working with us as your Realtors will give you access to all of the homes in your price range that meet your criteria. If we know what you’re looking for, we can find out about homes that meet your needs before they even hit the market. This can be really advantageous and help ensure you get the home you want. We also work for you to negotiate the best price on the house you want and then we’ll help guide you through the process from the time the offer is accepted, to the day of possession. Trust us, there’s a lot of things to take care of you, but that’s why we’re here.

Buying a home is extremely exciting and by doing the things above you’ll be closer to home ownership. It’s a process and we’re ready to help make it happen for you.

If you’re looking to buy a home, feel free to contact me and let’s make it happen.

Have an amaZing day!

People First. Homes second. 

Garrett Zimmerman

Realtor

403.506.5795