Owning a home is one of the greatest experiences of your life. If you have never owned a home before, it will also be one of the most expensive experiences of your life. Therefore, you need to know how to save for your first home as well as develop a strategy to ensure that you can make the payments on your first home.
Start Saving As Soon As Possible
You have to make a 5 percent down payment at the very least to gain approval for a home loan. If you have a bad credit history or are self-employed, your lender may decide that you need to put more down. This means that you will have to save up to make that payment when you close on the home. It is a good idea to determine now how much you want to spend on a home to help you develop a savings target.
You May Have The Money Already
In Canada, you are allowed to withdraw money from your retirement account to help pay for your down payment and other closing fees. The money that you withdraw is considered exempt from taxes if it is repaid within 15 years. If you are buying the house with a partner or spouse, each person is allowed to contribute up to $25,000 from their own retirement account.
Look Into Assistance For First-Time Homebuyers
Borrowers who are looking for their first home may be eligible for payment assistance. Speaking to a mortgage consultant or lender in your area can help you determine if there are any programs available to help you. These programs are beneficial because the money that you get generally comes in the form of a grant as opposed to a loan. This means that you don’t have to repay the money that is given to you.
How To Pay For Your Home
You will be required to make monthly payments on your home until the loan is paid off. The easiest way to pay for the home is to make it your top priority. In other words, you pay your mortgage first as it will be your biggest expense each month.
If you are having trouble paying your mortgage, you may be able to get a loan modification from your lender. Borrowers who wish to pay their mortgages early are often allowed to do so. Making multiple payments in a month is a good way to pay your mortgage down faster while avoiding as much interest on the loan as possible.
Moving into your first home is a major milestone in your life. You are no longer forced to live with your parents or pay rent each month on a living space that you don’t build equity in. Make sure that you make paying your mortgage your top priority each month. If you can, attempt to pay more than the minimum payment to speed up the process of paying off your loan while paying less interest during the life of your mortgage.