Many individuals dream of homeownership but it can seem like a far-off goal with the high rent payments many people must pay. In May 2018, the average monthly rent payment for an apartment in Markham was $1,650. This is an increase in price from 2017 and even from just a few months prior. To better prepare for purchasing a home and the cost of homeownership, here are a few things to keep in mind.
1. Budget! Budget! Budget!
The best thing you can do when saving up for a home is to get a firm grasp on your current financial situation. You must determine where every penny is going. For example, you may be surprised to discover that you are spending $100 a month just on an occasional coffee each morning. Use your budget to find out where cuts can be made and place that extra money directly into your savings.
2. Start a Side Hustle
If you want to save more money, you must increase your income. While a raise may not be possible, you can always start a side hustle. This can be anything that you are good at or interested in — photography, cleaning, writing, designing, etc. Even tasks such as babysitting and dog walking can bring in a significant amount of money each month. Place all the money that you make from these side jobs directly into your savings.
3. Focus on Consumer Debt First
Your debt-to-income ratio will affect whether you are approved for a mortgage and can purchase a home. Rather than try to save up for a large down payment, set a goal to get rid of any credit card or other consumer debt you may have. This is beneficial for two reasons:
1 — You will boost your credit score, which will help you receive a better interest rate
2 — You will save more money by not accruing large interest charges each month
4. There is No Such Thing as Extra Money
When you get a bonus from work or you have received your yearly tax refund, don’t spend it on frivolous items that you don’t need. Instead, put it directly into your savings. Depending on how much you receive, you can put away hundreds of extra dollars each year, helping you reach your financial goal much faster.
When it comes to saving for a home’s down payment, particularly when you pay high rent each month, it is important that you develop self-discipline and manage your money well. And once you are ready to purchase your Markham home, contact me and let’s find the home you’ve been dreaming about.