A Surefire Plan to Saving a Downpayment
Expert Financing • March 16, 2021
If you’re looking to save money for a downpayment; or to save money for anything really, it all starts with clarity. First, you want to get clarity around your income, then clarity around your expenses, and then you need a plan. And although this might seem fundamental, sometimes going back to basics is the best place to start.
Income.
If you’re going to be saving money, you’ll need to identify just how much money you’ve got to work with! You need to get clarity around your income. The best way to do this is to write it down. This could be with paper and a pen or on a spreadsheet; whatever way works best for you is fine. The goal is to have all your income in front of you!
If you’re on a fixed income or receive a salary for work, your calculations might be pretty simple. However, don’t forget to include any variable income sources. This could include work income like overtime, bonuses, or shift differentials. Or it could include other income sources like an annual tax return, child tax or government benefits. Spend time here and make an exhaustive list of all your income sources.
Expenses.
While income is on one side of the coin, expenses are on the other. Once you’ve identified what you have to work with, the next step is to figure out just how much you actually spend to maintain your current lifestyle.
Start by identifying your regular bills, then look at your discretional spending. If you have a budget already in place, you should be able to identify these numbers easily. If not, you can expect that getting clarity around your expenses will be very enlightening. It might be worth looking through a few months of bank statements to see just how much money you actually spend.
Information is the key to finding clarity. The more information you have, the more equipped you will be to save money. Just like your income, write down all your expenses. This will allow you to assess your spending and then prioritize where you spend your money.
Put together a plan.
Once you know your income, and once you’ve identified all your expenses, you need a plan on how to make more money than you spend. And although that sounds so simple. It really isn’t. The majority of Canadians spend more money than they make and incur debt. If you’re spending more money than you are making, you need to increase your income or decrease your expenses. How you do that is completely up to you.
However, the truth is, most people work better when they have a plan to follow. So if you’re still reading this article, chances are you’d like to buy a home in the near future, and you’re looking for guidance as you save for a downpayment. I can help.
As an independent mortgage professional, I can actually help you navigate all aspects of mortgage financing. Because just like saving for a downpayment is about managing income and expenses, so is getting a mortgage. Income and expenses, along with credit and property, are what a lender looks at when assessing your suitability for a mortgage.
While you might assume that putting together a plan for how to save a downpayment is where you should start, it might not be the best place to start. Saving money takes time, and while you're doing that, there are other things you can be doing at the same time to increase your chances of qualifying for a mortgage sooner.
Contact us anytime to get started. Together we can assess your financial situation and put together a plan to not only save for a downpayment but to get you into a mortgage sooner.
Rebecca Harrap & Wendy WhitingEXPERT FINANCING
CONTACT US
RECENT POSTS
Starting from Scratch: How to Build Credit the Smart Way If you're just beginning your personal finance journey and wondering how to build credit from the ground up, you're not alone. Many people find themselves stuck in the classic credit paradox: you need credit to build a credit history, but you can’t get credit without already having one. So, how do you break in? Let’s walk through the basics—step by step. Credit Building Isn’t Instant—Start Now First, understand this: building good credit is a marathon, not a sprint. For those planning to apply for a mortgage in the future, lenders typically want to see at least two active credit accounts (credit cards, personal loans, or lines of credit), each with a limit of $2,500 or more , and reporting positively for at least two years . If that sounds like a lot—it is. But everyone has to start somewhere, and the best time to begin is now. Step 1: Start with a Secured Credit Card When you're new to credit, traditional lenders often say “no” simply because there’s nothing in your file. That’s where a secured credit card comes in. Here’s how it works: You provide a deposit—say, $1,000—and that becomes your credit limit. Use the card for everyday purchases (groceries, phone bill, streaming services). Pay the balance off in full each month. Your activity is reported to the credit bureaus, and after a few months of on-time payments, you begin to establish a credit score. ✅ Pro tip: Before you apply, ask if the lender reports to both Equifax and TransUnion . If they don’t, your credit-building efforts won’t be reflected where it counts. Step 2: Move Toward an Unsecured Trade Line Once you’ve got a few months of solid payment history, you can apply for an unsecured credit card or a small personal loan. A car loan could also serve as a second trade line. Again, make sure the account reports to both credit bureaus, and always pay on time. At this point, your focus should be consistency and patience. Avoid maxing out your credit, and keep your utilization under 30% of your available limit. What If You Need a Mortgage Before Your Credit Is Ready? If homeownership is on the horizon but your credit history isn’t quite there yet, don’t panic. You still have a few options. One path is to apply with a co-signer —someone with strong credit and income who is willing to share the responsibility. The mortgage will be based on their credit profile, but your name will also be on the loan, helping you build a record of mortgage payments. Ideally, when the term is up and your credit has matured, you can refinance and qualify on your own. Start with a Plan—Stick to It Building credit may take a couple of years, but it all starts with a plan—and the right guidance. Whether you're figuring out your first steps or getting mortgage-ready, we’re here to help. Need advice on credit, mortgage options, or how to get started? Let’s talk.
Mortgage Registration 101: What You Need to Know About Standard vs. Collateral Charges When you’re setting up a mortgage, it’s easy to focus on the rate and monthly payment—but what about how your mortgage is registered? Most borrowers don’t realize this, but there are two common ways your lender can register your mortgage: as a standard charge or a collateral charge . And that choice can affect your flexibility, future borrowing power, and even your ability to switch lenders. Let’s break down what each option means—without the legal jargon. What Is a Standard Charge Mortgage? Think of this as the “traditional” mortgage. With a standard charge, your lender registers exactly what you’ve borrowed on the property title. Nothing more. Nothing hidden. Just the principal amount of your mortgage. Here’s why that matters: When your mortgage term is up, you can usually switch to another lender easily —often without legal fees, as long as your terms stay the same. If you want to borrow more money down the line (for example, for renovations or debt consolidation), you’ll need to requalify and break your current mortgage , which can come with penalties and legal costs. It’s straightforward, transparent, and offers more freedom to shop around at renewal time. What Is a Collateral Charge Mortgage? This is a more flexible—but also more complex—type of mortgage registration. Instead of registering just the amount you borrow, a collateral charge mortgage registers for a higher amount , often up to 100%–125% of your home’s value . Why? To allow you to borrow additional funds in the future without redoing your mortgage. Here’s the upside: If your home’s value goes up or you need access to funds, a collateral charge mortgage may let you re-borrow more easily (if you qualify). It can bundle other credit products—like a line of credit or personal loan—into one master agreement. But there are trade-offs: You can’t switch lenders at renewal without hiring a lawyer and paying legal fees to discharge the mortgage. It may limit your ability to get a second mortgage with another lender because the original lender is registered for a higher amount than you actually owe. Which One Should You Choose? The answer depends on what matters more to you: flexibility in future borrowing , or freedom to shop around for better rates at renewal. Why Talk to a Mortgage Broker? This kind of decision shouldn’t be made by default—or by what a single lender offers. An independent mortgage professional can help you: Understand how your mortgage is registered (most people never ask!) Compare lenders that offer both options Make sure your mortgage aligns with your future goals—not just today’s needs We look at your full financial picture and explain the fine print so you can move forward with confidence—not surprises. Have questions? Let’s talk. Whether you’re renewing, refinancing, or buying for the first time, I’m here to help you make smart, informed choices about your mortgage. No pressure—just answers.
