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First job? Start prepping for home ownership today


Now that you’ve graduated and you're starting your new job, you're entering the next chapter of your life. While you may be enjoying time with friends, learning the ropes at work, and freedom from studying, now is also a good time to start thinking about your future first home. Here are five tips to find ways to start preparing for the financial realities of home ownership.

Live on a Budget

Although you were introduced to living on a budget as a student, that steady paycheque you’re earning gives you the opportunity to fine-tune your household finances and add “debt repayment”, “emergency savings”, and “savings for your first home” as new categories in your budget.

Becoming a disciplined budgeter and saver before you own a home will help you better manage your finances as a homeowner. Start this as soon as you begin your first job to maximize your down payment savings.

Save Automatically

To avoid the temptation of skipping or delaying down payment savings, set up an automatic debit to a down payment savings account (or to an RRSP if you plan to withdraw under the Home Buyers’ Plan) so you're saving with every paycheque that goes into your account. Or give our Sweep feature a try to automatically “sweep” money from your Meridian Chequing Account to your Good to Grow High Interest Savings account to build your savings even faster.

Save Your Windfalls

Have you received an unexpected cash windfall? If so, use it to help you achieve your home  ownership goals sooner. Use performance bonuses, tax refunds, inheritances or other cash windfalls to build down payment savings. And don’t forget to negotiate the price on purchasing items and services big and small, then apply the money you save towards your down payment savings fund.

Build Your Credit Score

When you apply for a mortgage, lenders often start by reviewing your credit score. Get your current credit score through Equifax Canada or Transunion. Confirm the information it contains is accurate, then work on making it better to get the best mortgage rate quotes when you're ready to buy.

Paying down your debt (like your credit card balances and student loans)  will improve your debt-to-income ratios helping you qualify for more money when you’re ready to buy your first home. It may also help your credit score, and a higher credit score may help you get the best interest rate on that mortgage.

Research Potential Neighbourhoods, Homes and Mortgages

Even if your dreams of homeownership are several years away, start researching now so you can better position yourself to buy your first home when the time is right.

Get to know potential neighbourhoods and check out their amenities and options that may be important to you such as  access to public transportation, recreational facilities, or restaurant and entertainment venues. Read up on the the new mortgage rules for Canadians, and research prices, property taxes, and condo fees if necessary so you’ll have a realistic idea of how much a new house/condo may cost down the road.

Don’t become discouraged by the high (and continually rising) prices of homes in many Canadian cities. Instead, consider possible alternatives to a traditional mortgage for financing your home purchase. Maybe you could get a roommate, or even consider Meridian’s Family & Friends Mortgage created for today’s modern home buyer. Up to four qualified family members and/or friends may combine their income and down payment to purchase a larger home together.

For more information on how to meet your financial goals when you’ve just started at your first job, book an appointment at your local Meridian branch today.

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