If you’ve made the decision to buy a home, you’ll probably be taking a closer look at your finances to figure out how to reach your homeownership goals. Whether it’s your first home or a new space to meet your family’s needs, saving towards a new home is no easy task. On top of that, you may have other financial goals you’d like to achieve as well like saving for retirement, a well-deserved vacation, or building an emergency fund.

The good news is that you don’t need to sacrifice one financial goal in exchange for another. By assessing your financial situation, prioritizing your goals, and putting a plan in place, you can work towards achieving each goal.

Evaluate Your Finances

Before setting any financial goals, take some time to thoroughly assess your finances. Look at your income and expenses to get an accurate sense of how much money you’re working with when it comes to saving towards your goals. Creating a budget is a useful tool to stay on top of your finances and there are many free resources online to help you get started.

Quick Tip:

Don’t overlook small spending habits that may impact your finances. Making your lunch a few times a week instead of buying takeout or bringing a coffee from home can be an easy way to save!

Morning Latte $6 per latte x twice a week Save $624 per year

Takeout Lunch $15 x twice a week Save $1,560 per year

In addition to the practical benefits of evaluating your finances, it also serves as an emotional check-in. Is your spending aligned with your values, what you want for your future? Approaching your finances from a holistic perspective can help as you move on to the next step.

Prioritize Your Savings Goals

Buying a home may be at the forefront of your mind but your other financial goals are important too! Consider how a home purchase fits into your overall financial plan by making a list of your financial goals. Categorize your goals based on their importance to you and how long it would take to reach the goal. Here are some common financial goals and how they may be categorized.

How you prioritize your financial goals is personal and will look different for each person. For example, if buying a home is a top goal on your list, you may be willing to forego a family vacation for a year or two to help build your down payment.

Create A Plan

Once you’ve created a list of your financial goals and where they rank in terms of importance, determine how much you’d need to reach your goal and how long you have to reach it.

To save for all these goals, one would need to set aside a little over $2,000 a month. If you’ve already established a budget and have an idea of your income and expenses each month, you’ll be able to determine if this is a realistic amount for you to save. If not, you may need to re-evaluate and see where you can be flexible.

Use Your Resources

Ever heard the saying ‘work smarter, not harder’? The saying can apply to your financial endeavours! Sometimes reaching your financial goals is about more than just saving more and spending less, it’s also about using your resources to your advantage.

If you have a goal of saving for retirement, inquire if your employer offers retirement savings matching programs where a portion of your salary is deducted from your paycheque with your employer matching a percentage of the deduction.

First-time Canadian homebuyers can also take advantage of accounts like a Registered Retirement Savings Plan, or an RRSP, and save for their retirement as well as a down payment for a home or to help pay for their education.

Expect the Unexpected

As much as we’d like to plan our future, life can take some unexpected turns. In terms of your finances, it’s always a good approach to plan for what you can while still being flexible. Some changes may positively impact your income like a career change or a significant raise, whereas others may be more challenging, like losing a job. Don’t be afraid to adjust your budget to fit your life.

Make Your Financial Goals a Reality

As you work towards buying a home and reaching your other financial goals, be sure to keep sight of what is important to you! By prioritizing your financial goals and staying informed with your finances, you’re making strides to a happier and healthier financial future.

Written by our Partner Marketing Team at MCAP

Being on the path to purchasing your first home is one of the most exciting and most rewarding moments in life!

To help make the mortgage process smoother, one of the things you can do is to get pre-approved for your mortgage. Getting pre-approved doesn’t commit you to a single lender, but it does guarantee the rate offered to you will be locked in from 90 to 120 days which helps if interest rates rise while you are still shopping!

Rate holds for mortgages offer several benefits including:

1. Protection Against Rate Increases: A rate hold guarantees that you will receive a specified interest rate for a set period, typically up to 120 days. This protects you from potential rate hikes during this period. Plus, if the rate should drop, you can still take advantage of the lower option!
2. Financial Planning: Knowing the exact rate you will pay allows for better financial planning and budgeting. It provides clarity regarding what you can expect for your monthly mortgage payments. This makes it easier to target the right price range of home so that you can ensure future financial stability.
3. Time for Decision Making: A rate hold provides peace of mind allowing you the necessary time to shop around for the right home. During this time, you can also compare different mortgage options without the pressure of changing interest rates. This is particularly useful when you’re considering different lenders or mortgage products.
4. Stress Reduction: It reduces the stress of rate fluctuations and uncertainties in the housing market. After the past few years of turmoil, knowing that you have a secured mortgage rate can take a lot of the pressure off shopping. Instead of feeling like you need to find a new home before the rates change again, you can take the appropriate time. Plus, if your rate hold expires, it is easy to submit for a new one!
5. Securing a Competitive Rate: While we are not anticipating interest rate increases in the coming years, securing a rate hold while you shop can save you money over the long term by locking in a favorable interest rate should anything pivotal happen in the market.

Overall, rate holds provide peace of mind, financial security, and the opportunity to make informed decisions when entering into a mortgage agreement. They are particularly valuable in fluctuating interest rate environments or when you anticipate delays in finalizing a mortgage transaction. Looking to purchase a home? Want more information on rate holds and the mortgage process?

Written by my DLC Marketing Team