How To Save More Money For Your Down Payment

In today’s Nanaimo real estate market making a bigger down payment can save you money up front and in the long run. Fees and insurance costs will be lower, and your mortgage payment will be more affordable. Here are some of the best ways to save more money for your down payment to buy a home in Nanaimo.

Plan ahead for your home down payment

Before you can begin saving for your down payment, you’ll need to now how much money you’ll actually need.

Talk with your real estate agent to learn what sellers are looking for in an offer. Then, speak with a lender to learn how big of a mortgage you can qualify for and how the size of the down payment affects the terms of the loan.

Then, determine your timeframe before you buy your home. Divide the total down payment by the number of months or years to calculate your savings goals.

Best ways to save more money for your down payment

Once you’ve figured out how much money you’ll need for your down payment, follow these steps to start saving smarter and faster. If you need extra motivation, keep an eye on the Nanaimo real estate market for homes that could be yours while you’re saving up.

Turn down the bank’s offer to link the account with a credit or debit card. Try to transfer a fixed percentage of your income every week into the account, even if the amount is small. High-yield savings or money market accounts are good for holding down payment funds because they pay more interest than a regular bank savings account.

Yes, running to the bank all the time to withdraw cash can be a pain, but that’s exactly the point. The harder it is to spend money, the more you’ll be able to save for your down payment.

There’s a reason that grocery stores and retailers put items for sale at the end of each aisle and at the checkout line. It’s because they know people will be tempted to spend money on spur-of-the-moment things they don’t really need. When you go shopping, take a hand written list or use a smartphone app to make a checklist and stick to it.

Nothing can be more frustrating than not reaching a goal. The last thing you want to do is start thinking it’s too difficult to save for your down payment. Smaller goals are easier to reach than bigger ones. So, instead of trying to save a large amount of money at one time, break it down into doable weekly amounts.

Imagine any extra money you receive from working overtime, or from bonuses or cash gifts, going straight into your down payment savings account. If you’ve already mentally saved the money, you’ll be much less likely to spend it on something else.

Remove the temptation to spend more by removing yourself from the email lists of your favorite stores or brands. You’ll be less likely to succumb to the temptation to spend on things you don’t really need.

While it might seem counter intuitive to use money you could be saving to pay off a credit card balance, this strategy actually helps you save a surprising amount of money. Interest payments on credit card balances can easily add up to hundreds or thousands of dollars each year.

As a bonus, not having credit card balances can improve your credit score, creating better terms on your mortgage when you do buy your new home in Nanaimo.