Being a teen, you probably have other things on your mind like which party you’ll go to this weekend or getting tickets to that sold-out concert, other than thinking about buying a home, however, there is no better time to prepare to buy a home than now. Right now!
Young adults usually put off thinking about buying a home until after they graduate from post-secondary school and get a job. However at that stage, you may already be behind in terms of potential savings that you could have had, had you started as a teenager.
Tips you can use now to prepare to buy a home later:
Establish good credit habits
If you don’t already have one, get a credit card (you have to be the age of majority in each province to get a credit card on your own, however, some banks allow your parent/guardian to add your name to theirs if you’re 16), and ensure you pay off your monthly balance on time.
Begin to charge small things, like gas or movie tickets that are easy to pay off and will help improve your credit score.
Start saving for a down payment
Banks require a minimum of 5% of the purchase price before they will lend you money. Saving a little each month now will help you later.
For instance saving $100 a month for 10 years will give you a savings of $12,000; this amount might not be enough for your dream home, but it’s a start.
Start investing in an RRSP
As a first time home buyer, you qualify for government programs that can assist you.
One program, the Home Buyer’s Plan, allows you to withdraw money from your registered retirement savings plans (RRSPs) to buy or build a qualifying home.
Ask for advice
Don’t be shy about asking your parents, grandparents or other family members who have purchased a home for advice; this is a major purchase and should be done with lots of thought. Consider speaking to a Realtor or Financial Planner as well, as they are professionals in their fields and can give you the advice you need to get started.
It is never too early to start planning for the future, you have, actually, been doing it all your life. You planned your weekends, which college or university to attend, and even which career path to follow. Why not start planning your home, and how you will pay for it?