Pay off all your credit card debts
It’s very hard to save money when you are paying interest on someone else’s money every month. Start with the smallest debt you have and work your way up to the biggest. Having too much consumer debt will not help you qualify for a mortgage so it’s important that you don’t let your spending get out of control.
Make buying a house a top priority in your life whether it’s in 3 months, 6 months or a year you have to make a commitment to this goal. Tighten up on your spending habits this means eating out each week or going to the bar every weekend needs to stop. Identify the areas in your life where you could cut back on spending and put more money into your savings account.
Make a budget to track your spending! Really sit down and review your bank statements and come up with a budget for each moth of what you make, how much you need and what’s left over will be what you can save or spend. But think “how bad do I want this house”. By not sticking to your plan you could potentially be pushing the buying time months down the road.
Borrow from your RRSP
Did you know that you can withdraw up to $25,000 from your RRSP to buy your first home? This is a great way to come up with a down payment if you already have some RRSPs. If you don’t, this may be a good way to save money for your RRSP and at the same time get a tax credit to help reduce your taxes. The only catch to this program is that you have to pay the money back to your RRSP within 15 years. If you don’t repay the money, it is treated as income and you will have to pay tax on the money you withdrew as though it were income.
First Time Home Buyers Program
See if your city offers some type of first time home buyer program. These programs could be an interest free loan for a period of time, or 5% down payment up to a specified amount. Every city is going to have a different plan so check out your local housing information on your cities website.