We bought our house almost two years ago and started saving for a home deposit or down payment a couple of years before that.
Our savings progress started out quite slow, as I wasn’t making nearly as much money at the time as I was when we bought the house, but by the time we went to buy our house we had a substantial chunk of money saved up.
We worked really hard to amass a down payment. Here are a few things that we did that may work for you:
Worked a Side Hustle
Instead of cutting all of our expenses down to nill, and struggling through a couple of years of extreme frugality to save up more money, I decided to take on some extra work.
I picked up a writing gig, began monetizing a blog that I ran and even started babysitting. This helped us save up a lot of money, as all of the extra cash I earned from these side hustles went straight into our high interest savings accounts.
Make Passive Income On Your Savings
We put all of our home deposit savings into a high interest savings account and in mutual funds in our TFSAs. This helped us earn interest on the money that was in there, which compounded and paid us even more.
Assuming you can’t save up for a down payment in a short period of time, investing the money for a couple of years is a great way to make extra on what you’ve already saved. It’s a way of making your money work harder for you.
Make Sure You Know How Much You Need
To reach a goal, you need to know what that goal is. While it may seem too far off to know, it’s a good idea to look into what type of home you want to buy prior to setting your home deposit goal.
This will help put things into perspective, and also give you an idea of what percentage you want to put down.
You can put anywhere from 5% down up to 100% down, and of course the more you put down the better position you’ll be in.
Some mortgaging companies will help you put less down, like Homestart low deposit home loans. Be careful with putting too little down, though, as you often have to pay PMI in North America which can be a hefty sum.
Down payments don’t have to be too difficult to save for, you just have to know what you are doing.