You’ve been working diligently to come up with a down payment for your first home, but sometimes it feels like you’ll never have enough. Surprisingly, you don’t necessarily need to have the full down payment in order to get started on the process of buying a new home. StreetSide Developments is constantly building new homes. This gives buyers the opportunity to finish up their down payment savings in a specific time period while the builders are finishing the home. Home buyers can take advantage of a few different payment plan options.
To make things easier to understand, we’ll use the same example situation throughout:
A person with $4,000 already saved up wants to purchase a $200,000 home. The required 5% percent down payment on a home like this would be $10,000, so this person needs an additional $6,000 before purchasing the home.
Check out the following programs this person could use to get into their new home:
Bank-Approved Funding
Many people don’t realize you can take out a loan to use for your down payment. This is typically done by borrowing from your RRSPs. Through the Home Buyers’ Plan, you’re able to borrow up to $35,000. The money must be repaid within 15 years, and banks will factor this repayment into their calculations when determining how much you can afford. The person in our example could easily borrow the $6,000 he or she needed to get the five percent down payment.
Home at Drywall Stage
A home at the drywall stage still has about 2 to 3 months before the new owner can move in. If you used this plan, you’d sign a contract with StreetSide to ensure the home would be yours. After, you’d be required to put savings into your account over the next 4 months so you’d have the $10,000 down payment by the time your home is ready for possession. Using our example, you’d have to pay $2,000 each month for 3 months.
Home Is Pre-Construction
This is similar to the above scenario, but you’d have a bit more time to come up with the savings. In such a case, the home is already planned and starting construction shortly. You would have approximately 8 months to complete your down payment, so you’d only have to save up $750 a month. This lower amount is easier for a lot of people to fit into their budget.
Saving with StreetSide vs. Saving on Your Own
Of course, you’ve probably noticed these programs are basically savings plans. You might wonder why it would be better to do a program like this with StreetSide rather than commit yourself to saving your down payment on your own.
Most importantly, setting up this agreement with StreetSide means you get the home you want. These programs aren’t just about ensuring you save the money you need; they’re about securing the exact home you want. If you’re looking to purchase in a popular Edmonton neighbourhood that might sell out, you may not have the luxury of waiting a few months to start the purchase process.
However, a lot of people just need the extra accountability. You know you want to buy your own home, but when it comes to choosing between putting $1,000 into your savings account or having some fun weekends and only saving $500, some people cave in. It may be easier to put savings towards your home if you have someone other than yourself expecting the payments to be made.
StreetSide understands everyone’s situation is different. Our team will be able to go over all your available options and find a plan that works best for you. If you’ve been struggling to come up with your down payment, it’s time to take a closer look at your options. When you see the type of quality you can get at an affordable price, you’ll see it’s time to make a commitment.
Photo credits: application, couple
