Buying a home is a great way of investing in your future, but for those who have never done it before, you may be wondering where do I start. There are a number of things you will need to know about buying a new home, and a few things you’ll need to do before you can call yourself a homeowner. Buying a home is a big deal, and it does take some hard work as well as having trained professionals to help guide you through the process.
The Down Payment
One of the first things to consider is the down payment. As a first-time homebuyer, you can qualify with only a 5% down payment. A small investment into one’s future, but let’s face it – not always the easiest thing to do. Here are some helpful tips:
1. How to Start Saving for the Down Payment: Properly assessing your situation and coming up with a plan will be the key to your success. With some motivation and a well-prepared plan, you will be well on your way.
2. Start a Monthly Budget: Creating a monthly budget and deciding how much you can save per month is a great way to start. Just putting aside a few hundred dollars a month can make a big dent in a down payment in no time at all. Most banks have ways to help you save. Programs like automatic savings’ and other options that put money into your savings account every time you use your debit card to make a purchase can also help for those of us who are not so disciplined.
3. Take Advantage of the Home Buyer’s Plan: The federal government created a first time home buyers program called “The Home Buyers’ Plan” (HBP). This program allows you to withdraw money from your Registered Retirement Savings Plan (RRSP). You and your spouse or common-law partner are each allowed to withdraw up to $25,000 tax-free from your RRSP to be used towards a down payment. You then have up to 15 years to repay your RRSP the amount withdrawn. For more information, you can find out how on the Canada Revenue Agency’s website: cra-arc.gc.ca.
4. A Tax-Free Savings Account: Having a Tax-Free Savings Accounts (TFSAs) is another great way to save for the purchase of a new home. Not only will your money grow tax-free, but you also won’t pay taxes when you withdrawal your money. Make both your RRSP’s and TFSA’s work for you towards getting into a new home.
5. Avonlea Homes – We have a Plan: At Avonlea Homes, we can provide you with an alternative option where you can split the balance owing on your down payment into 6 equal instalments. Save for your new home while we build it! Ask one of our trained professional sales advisors for full details.
Saving a down payment can be daunting, but with these 5 tips and a little help, you’ll be able to make your dreams of home ownership a reality. A well laid out plan and some great resources will help you achieve your goal of home ownership.
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Avonlea Homes Sales Advisor
[email protected] | 403-393-3300