The size of your down payment will have a large impact on your finances as it will determine your mortgage payment and initial equity in your home. In Canada you’ll save a ton of money in mortgage insurance premiums if you can put down at least 20%. Lastly, the higher your downpayment, the better your chances of getting the mortgage approved.
What Can You Afford To Save?
Take your monthly income minus your monthly expenses and you’re left with potential monthly savings. When purchasing a house you’ll need lawyers fees, real estate fees and that will need to come out of that savings. To get an accurate amount, talk to a mortgage broker like myself, as fees can vary drastically.
What Can My Realistic Mortgage Payments Get Me?
Take your current rental expenses plus a portion of your monthly savings you’re comfortable adding to your monthly mortgage payments and you’ll have an idea of what you can afford per month. Use a mortgage calculator on my website: https://mortgageinnovators.ca/calculators to figure out what your monthly mortgage payments can get you for a purchase price. Shop around and see if you can afford your list of wants and needs.
Set Your Savings To Automatic
After you’ve calculated your monthly savings, make sure you create a savings account and set the deposits to happen automatically, preferably on pay day.This way you won’t be tempted to spend your monthly savings. You can do this with your online banking or go into your branch for help.
First Time Home Buyers RRSP Withdrawal
Contact a Toronto mortgage broker like myself for more information on this. It’s a great way to bump up the down payment without getting taxed on your RRSP withdrawal. It’s available for first time home buyers only.
