If you’re getting turned down for a mortgage, a good way to increase your chances is having a larger down payment for your house. This shows that you’re serious about your investment and the banks can be serious about it as well. Easier said than done right? Here are a few tips to help you out.
- Prioritize – You have to make saving for your house a priority. Do you need a new car this year or will the one you have last for a bit longer? Do you need to go out for dinner or can you eat at home? Finding ways to cut back so you can put more money in your savings account is huge. Creating a budget is the first step, then you need to stick to it.
- Pay off your credit cards – The interest you are paying on your credit card will be far more than the return on any TFSA or RRSP you can hope to have. Get rid of that debt and stop wasting money paying interest to other people.
- Save more from work – The next time you get a raise, bonus, extra commission, tax refund etc. put it in a separate savings account and don’t touch it. You were living fine without the money in the first place, you don’t need to change now.
- Utilize a TFSA – This is an ideal place to save for your first home. The money is able to grow tax free without being hit with income tax. Talk to a financial planner to help with this.
- Borrow from your RRSP – If you already have money in your RRSP, you can borrow up to $25,000 to buy your first home. If you don’t have an RRSP, it may be time to set one up. It’s a good way to save money while at the same time getting a tax credit. You do have to pay the money back within 15 years, however, so make sure you factor that in to your considerations.
There are many other ideas to save for a down payment. Speak to a mortgage specialist today to get started.