So, you’re young and you want to buy a home.
Good idea. It’s a smart investment and a great plan for your future. Hurray to you! But how do you actually do that? What are the steps you need to take to get there? Where do you even start?
We have some ideas . . .
10 things that will help you become a first-time buyer (F*** yeah)!
#1 – Set Up Automatic Savings
Go to your bank and have 10% of every paycheck automatically go into a TFSA or Standard Savings account. If you never see the money you won’t miss it.
Pro Tip: Set the account up so it can’t be accessed by your debit card.
#2 – Start Brown Bagging It
That $18 Vegan salad isn’t helping you get any closer to buying a new home. Try recreating your favourites at home and then bringing a delicious lunch to work with you. You could quickly start saving yourself an extra $4,000 per year.
#3 – Contribute to your RRSP’s
RRSP’s are a great way to save as you receive a tax credit for every dollar saved. The kicker is that you are able to borrow up to $25K of your RRSPs for the down payment of your first home, without losing that tax credit. The only thing to note is you have to pay it back within 15 years.
#4 – Office Coffee
Skip the Orange Mocha Frappuccino or other fancy coffee drinks and opt for a delicious mug of home-brewed coffee instead. Or better yet, stop in at Condos.ca for a chat about how to buy a condo in Toronto and enjoy our free office coffee.
#5 – Get your Credit Cards Paid Off
The high interest rates on credit cards are going to make it difficult to save. If you hold an average of $10,000 in credit card debt over a year it will cost you $2,000 of savings annually. Not to mention most lenders are going to ask you to have credit cards paid off before giving you a firm approval, anyways.
#6 – House/Dinner Parties
Instead of spending your weekends eating out at expensive restaurants or hitting the bars with friends, start hosting fun dinner parties or potlucks with your friends, or throw a house party if you want to turn it up a notch. For young people living in a city like Toronto, this could easily become your biggest source of savings.
#7 – Move Down a Level
If homeownership is the endgame, then why not rent something smaller and cheaper while you are saving for that down payment. Even consider living with your partner or a roommate. Without a doubt, it will lead to you being able to buy something sooner.
#8 – Take A Road Trip
Skip the fancy all-inclusive resort or the Euro-trip vacation and opt for a simple road trip that explores some of the more local sites. There are a ton of beautiful, exciting destinations within driving distance of Toronto in Canada and the U.S. For even more savings, try camping along the way instead of checking in to a hotel or a B&B.
Pro Tip: You can often park overnight in Walmart parking lots.
#9 – Take the TTC (or bike)
If possible, sell your car and take the TTC, especially if you are financing. The average savings of over $3,000 is one thing, but if you have car payments you will qualify for less of a mortgage, as well. And, if possible, ditch the TTC and ride a bicycle.
#10 – Netflix & Chill
Switch out that Cable service for a Netflix or CraveTV account. The savings are astronomical and there are no annoying commercials. Come on!
Pro Tip (kind of): Better yet, if you have Amazon Prime you get free Prime Video.
All right, hope that helps! Take that life!