Ishan  Verma

Ishan Verma

Broker

CENTURY 21 EMPIRE REALTY INC. Brokerage*

Mobile:
647-807-7764
Office:
(905) 454-1400
Email Me

How To Save For Down Payment For Your Home

 

Buying a house comes with a big hurdle of saving up for down payment. Especially if you are a First Time Home Buyer or a Millennial and are planning to make a move towards your first home, there are so many hurdles but yet, there are so many solutions.

Saving money can be a big challenge but like it is said, “Every drop adds up and makes the Ocean”. After you are mentally prepared to buy a house and have figured out how much you need for the down payment, there are a few steps that might help you to save money on regular basis and won’t even know. 

After you know how much you have to save for Down payment and closing costs, start planning for how to cut your expenses and save money. Here are a few tips which I have learnt over the time and my peers have taught me and some I of course googled:

Stop Partying or Party Less

If you are a party person, stop that today itself. Know your priorities and work towards them. If you think, it can save you thousands of Dollars. How? Here is why:

Average Expense of 1 party night per week: $30 – Entry ticket to a party place + $200 – Food and Drinks + $50 – Commute = Total - $280

If you multiply this with every week which would be $280 * 52 = $14,560.  

$$ Ching $$ $$ Ching$$ Suddenly your bank account is feeling better!

Make Morning Coffee / Tea at home

This is a common habit that we all are guilty of. Try to make your morning drink and snack at home which will save you some money.

For Example: $2 For drink + $3 For Snack = Total - $2 + $3 = $5

Hence if you multiple this with 52 weeks, Yearly cost: $5 * 52 = $260.

Replace one time use items with reusable items (Paper towels to microfiber cloths)

Using microfiber cloth instead of paper has many benefits. First it helps us saving money second it helps with saving the environment well. On an average one person’s usage of paper supplies can cost $30. Yearly cost: $30 * 12 = $360. 

If you need anything, see if you can borrow from your friends or family

If you need an equipment like garage tool, kitchen appliance or any other equipment that you might use once or twice a year, try to borrow them first from your near and dear ones instead of spending money to buy them which you will only use a few times in a year.

Use public Transport as much as you can or Carpool to work

If you don’t have a co-worker not living close to you, try taking public transit. This will save you fortunes as most public transit charge flat fee rather than driving per kilometer or mile. If you have a co-worker living close to you, try carpooling.

Sell your vehicle if you can

If you have the option of carpooling or public transit, sell your vehicle. This will be your biggest cut that you might take. Apart from car payment you will also save on Car insurance payment which on an average, in Brampton, runs about $2,494 annually.

If you can’t sell it, take good care of it to reduce maintenance costs

Drive your car at an average speed so you don’t burn obnoxious amount on Gas, Will also help you to make your tires last long and less wear and tear on vehicle and ultimately less repairs. Read more about how to save thousands on car expenses here.

Pick a hobby that pays you

If you have a hobby, start making money using it. If you are a good soccer player, apply for a job at local community centre for soccer coach, will keep you happy, entertained and will pay you. If you love painting, start selling your art work online. If you are skilled at courses, try giving out private lessons and make money. Its always a good way to use your hobby wisely.

Pick a hobby that saves you money

If you have some down time, try picking hobbies that will save you or make you money. Have interest in gardening, will not only stop you from going out and spending money but will give you “fruitful” and “vegetableful” results which will eventually save you money as well.

Pick a part time job if you have lots of down time

If you have a lot of down time after your job or school, pick a part time job at a local restaurant or somewhere close by. Will help you get some extra income and help you towards your goal.

Stop Shopping for things that you don’t necessarily need

We all are guilty of shopping for clothes, shoes and other things that we don’t really need. Stop going to the malls if you have some time, go to a park. Making unnecessary trips to malls always results in buying impulsively.

Reduce grooming expenses

If you get your hair styled every week, try going after two weeks. If you get your hair colored very often, try reducing that, If you get your nails done every week, try reducing it to two weeks.

Buy less expensive stuff, but don’t compromise with quality (Buy generic brands)

When you shop for anything online or in store, try buying generic brands. Usually some things cost you more just because they are branded. Try holding yourself to buy expensive brand clothes, bags, handbags and shoes atleast until you have achieved your goal of saving money for house.

Consolidate your study loans

If you have study loans with different institutions, try consolidating them so you can get a value saving, probably less interest rate as well.

Consolidate your debts

See a financial planner and talk to them about consolidating your debts so you can save money. It is important to take professional and good advise.

Put a garage sale for the items that you no longer need

If you have a lot of stuff that you no longer need, like old clothes that don’t fit you, old books, magazines, furniture, décor, kitchen utensils and appliances, put them out for a garage sale. This will help you not just with decluttering but will also pay you!

Cancel the gym or club memberships that you don’t need

We have a gym membership and most of us only use for one month in a year. If you haven’t hit the gym in the last 3 months, cancel it. The same goes for other club memberships that you don’t use often.

Watch movies at home not in the Theatre

We all enjoy watching movies in the theatre but we know if does add up and cost us a lot. Don’t forget, this way we are not just saving the movie ticket money, but the money spent on popcorn and snacks as well which most of the times cost us more than the movie ticket itself.

Choose inexpensive ways of entertainment

If you are an outdoorsy person, choose inexpensive ways of entertainment. Have friends over rather than going out, choose local summer parties, play in the park, take a hike, volunteer at a local music concert.

Save money spent on food (Cook at home / Meal prep)

This is where biggest chunk on our money is spent. Be wise and stay home and eat at home. There are so many websites that will teach how to meal prep for the whole week. Not only its nutritious and healthy but will save you fortunes in eating outside.

Get smart, use coupons for entertainment, food, visiting places

Use apps that have flyers online. When you go for grocery shopping, price match the stuff you are buying. If you are going out to any entertainment place like local comedy club, museum, adventure place or any other place, shop for the coupons online. Try to save as much as you can.

Request your credit card company to reduce rates

Keep an eye on the emails you get from your credit card companies. Call them after every six months to see if they are offering better rates or can reduce your yearly credit card fee.

If you already own a home, consider refinancing to see if you are getting a cheaper rate

This is a step that most home owners forget to take after they are done buying a house. Keep an eye on the market trends and understand your mortgage plan and see if you can get cheaper rate. Call your Realtor if he has good Mortgage specialist to help you with.

If you already own a home, try to cut your utilities usage

Try to reduce your shower time to save money spent on hydro bill. Try to use less hot water. Unplug all the devices and appliances that are not needed to work all day like iron, coffee machine, blender, toaster. Switch off the lights if you don’t need.

Cancel your cable subscription

We are in the world of technology and innovation. We all have phones where we can see important NEWS updates and we can keep up with the shows and movies online. Cancel your cable and use Netflix and Prime TV.

Reduce Travel Expenses

If you love travelling, make trips via road and take a few friends with you so you can split the cost of gas. Flying usually is more expensive than driving in most cases. Explore areas nearby rather than exploring abroad. Atleast until you have purchased your house.

Cancel any unnecessary subscriptions

Cancel any newspaper or magazine subscriptions. Cancel any other memberships that you may have like local community centre or club.

Buy things in bulk

When you are shopping for home, buy things in bulk which will help you save in long run.

Price match anything you buy or buy used

While shopping for anything let is be groceries or clothes or utensils or furniture or anything. Spend some time shopping around and getting quotes from different companies. Try to buy used appliances that are still good in shape. Do your research and then proceed.

Find a roommate to share living expenses

If you are living by yourself, have a roommate to share your living expenses. Average rent in Brampton is about $1800 and if you split it, it is a saving of $900.

Bundle your services (Home and auto insurance)

Bundling your service will always save you money in the long run. Try to negotiate on prices and see if you can get extra rebates.

Lower your cell phone bill

Always shop around and look for deals. Price match your current bill and features with other providers. If you have few devices under the same roof, try to get lines under main account to save you money. Look for family plans.

**Choosing the right Mortgage specialist can always guide you with other helpful information and other assets that you can use towards down payment.**

Always write down your goal where you see it everyday. Post it on your refrigerator, mirror, closet doors to remind you that you are working towards a goal and will keep you focused. Using the above said steps, there could be more, you would be able to save substantially and put together enough for the down payment. I hope this helps you all!

 

Thank you.

Kind Regards.

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