Buying a home is a big commitment just ask any home owner. You will want to make sure that you're ready for it before you sign a mortgage and start looking for that perfect property for sale. One of the things that will tell you if you're ready is whether or not you have managed to save up a good sized down payment. There are many reasons why you should want to do this and ways that you can do it in as little time as possible.
Getting a down payment of at least twenty percent of the total cost of the property will help to reduce the amount of interest that you're paying on your mortgage. This is certainly the biggest reason to wait until you have a figure saved that is above this level. The money that is going towards interest on your loan is something that really adds up over the years. By the time most people have paid off their loan, even if they do have a low interest rate, they have paid out more than double the original cost of that Chicago or Toronto real estate. What kind of rates are you possibly looking at ?(Toronto as reference):
It will help you secure a loan from a good lending company. There are a few different things that banks and lending companies look at when they are deciding whether or not you are a good candidate for one of the plans that a mortgage broker can offer you. One of these things is how much you have managed to save that will go towards a down payment. Someone who is able to save a quarter of the cost of the home that they would like to buy is more likely to make their regular mortgage payments than someone who is trying to buy a home with less than ten percent down.
If you're trying to save money for a down payment then you should start putting money away every month the way that you would when paying back a mortgage. Any real estate agent will tell you that this is a great test to see if your finances can really sustain this extra expense over several months or even a couple of years. You should never rush into buying a home or underestimate the importance of having a solid down payment when you're going into a home purchase.