According to a 2016 survey conducted by the Canadian Imperial Bank of Commerce (CIBC), about 85% of the population place home ownership on top of their priority lists. Current reports indicate that this remains true up to this day. Gaining ownership of a home is a significant milestone that gives individuals a solid feeling of security. This is true even if they have been a having hard time saving for down payment for a long period of time.
However, buying a house isn’t something that can be taken lightly. House prices have gone up to at least 5% for the first quarter of 2017. Average prices depend a lot on the location of the property too. For example, prevailing average home cost in Vancouver, BC is now at $1,008,000. Houses in Ottawa, Ontario have an average price tag of $374,000. Considering the current cost of living and the minimum wage rates being implemented, buying a house in cash is virtually impossible.
Of course, the most logical and practical way to own a house in any of the areas within Canada is through home loans. Depending upon the basic qualifications of individual and other factors, a housing loan can cover the needed money to finance a home purchase. However, most lending companies grant loans amounting only to 80% of the property’s cost or value. This means that an individual has to either save up for a 20% down payment or acquire a mortgage default insurance and get his loan classified as high ratio one.
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So, How To Save?
Of course, saving for a down payment is the most advantageous course of action for a prospective homeowner. There are actually many ways on which he or she could amass the needed amount over short period of time. Some useful suggestions include the following:
1. A Change In Financial Management Habits.
Learning to budget and cut costs is one of the most significant things that an individual can do towards saving some money for a down payment target. Seemingly small amounts spent on wants rather than needs could sum up to significant amounts when put together monthly. Imagine how much you could save if you will reduce your fine dining activities to half or totally slash away your impulsive shopping sprees during payday. The bottom line here is simple: build up your savings.
2. Make Your Savings Work.
There are many ways on which your savings could earn for you. The best tip here is to choose proven high-yield yet secure investment programs. Examples include bonds and subsidies provided by the government. It is also possible to tap into one’s Registered Retirement Savings Plan or RRSP.
3. Be Resourceful If You Are In A Rush To Raise Funds.
Selling off some unnecessary properties like extra vehicles, collector’s items, and other related things can surely beef up a down payment savings. A personal loan from your relatives or friends is also a fast way to generate cash for your goal. Whatever you do at this point in time should give you what you need without putting your financials at a great risk. Be resourceful but wise and careful.
Saving for a down payment could be a tough task to do. However, it isn’t impossible at all.
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