First Time Home Buyer Down Payment
One of the very first things that someone needs to do before even considering buying your first home is saving for a down payment. The amount for a first time home buyer down payment will really vary because it all depends on the cost of a home. At minimum you require a 5 percent down payment on the cost of a home. A more ideal amount would be 15-20 percent down payment but that may require a fair bit of saving time depending on your situation and the home you are looking to buy. A benefit to having a 20 percent down payment is avoiding having to mortgage insurance. This is required if you a down payment less then 20 percent.
If you are a first time home buyer, down payments might be easier to save for then expected. If you are renting, maybe consider downgrading and put the extra savings specifically towards a down payment. If you have credit card debts or other loans consider paying them off first and quickly. This will mean your future payments can instead go towards saving for a down payment. Possibly cut out extra like cable or lowering your monthly phone bill temporarily.
Another option to potentially give your savings a big boost is to borrow from your RRSP. If you have been contributing to this over a few years you likely will have enough to consider using for a down payment on your first home. Note, it will be required to pay this back but not all at once. You can read more about the Home Buyers Plan here.
Contact us if you are a first time home buyer and have a down payment ready! We would be happy to assist in finding your first home.