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Time to Think About Mortgages
Your home is likely to be your biggest purchase, so it’s important you know and understand what to consider when choosing your mortgage. At Peoples Credit Union we can help select the mortgage product which best suits your needs, allowing you to maximize what you can afford, to find payment terms that suit you best, and to pay it off sooner.
Peoples Credit Union offers first and second mortgages, CMHC and Genworth Insured mortgages, construction mortgages, MeritLine ® home equity Lines of Credit, and bridge financing. If you’re thinking about paying off some credit card debt, remodeling your home, or refinancing your existing mortgage, perhaps consider one of these loan products. A Peoples Credit Union mortgage can help you achieve your goals while saving you money by offering competitive rates, which may translate into lower payments.
Types of Mortgage
With so many mortgages available, choosing the right one may feel a bit overwhelming. After all, your home means a great deal to you, so you want to feel confident that you’ve made the right decision. Peoples Credit Union offers members a variety of mortgage options, and we’ll help you choose the one that’s right for you.
Open Mortgages
You, the borrower, have the option to repay any amount of the balance owing at any time without penalty.
Closed Mortgages
Peoples Credit Union offers great repayment terms on closed mortgages, allowing you to make annual lump sum payments of up to 25% of your original mortgage amount, and up to double your mortgage payments in any month, non-cummulative. These flexible repayment terms allow you to pay off your mortgage more quickly. Compare these benefits to other financial institutions where some closed mortgages do not allow you to make extra payments or early repayment. Closed mortgages may offer lower interest rates as an incentive to lock in for a set period of time.
Fixed Rate Mortgages
Fixed Rate mortgages offer you the security of a fixed interest rate that will not change for the entire term of your mortgage. You will always know exactly what your payments will be …making it easier for you to budget.
Variable Rate Mortgages
Variable Rate mortgages are open, so your payment options are completely flexible. The interest rate changes with the prime rate, and therefore your payment amount could be subject to change at annual review. This type of mortgage allows you to keep your options open during times of fluctuating interest rates.
Mortgage Rates
At Peoples Credit Union, we offer competitive rates that compare with any financial institution. We review rates daily to ensure we remain competitive and current, enabling us to give our members the best financial products available.
Construction Mortgages
If you are building your home, you may need a construction mortgage. Construction mortgages are the same as conventional variable rate mortgages with the exception of the monitoring and disbursement of funds as well as re-payment options. The Credit Union will advance funds during the course of construction when all conditions of the mortgage loan offer are satisfied
(i.e. sub-search by lawyer, interim appraisal etc). Disbursement of the construction mortgage occurs at specific stages of the construction process. Prior to each advance, a physical inspection of the site is to be completed by the appraiser and disbursements follow a pre-determined schedule.
CMHC and Genworth Insured Mortgages
When a home is purchased with a down payment between 5% and 25% of the purchase price, it is referred to as a high ratio mortgage. These mortgages must be insured by either Canada Mortgage & Housing Corporation (CMHC), or Genworth Mortgage Insurance Corporation. To protect the lender, these mortgages carry insurance premiums. The insurance premium will vary depending on the amount of advance over 75%. This premium may be added to the mortgage amount advanced. The PST charged on the insurance premium may not.
MeritLine® - Home Equity Line of Credit
Our home equity line of credit lets you access the money you want when you want it. You can get a line of credit with a pre-approved limit based on the amount of equity in your home and there’s no need to re-apply each time you need access to the funds. A MeritLine® allows you to borrow with maximum control, choice and flexibility, while receiving a very attractive rate.
Choose The Mortgage Thats Right For You
| Type |
Fixed Rate Open Mortgage |
| Right for you? |
If you think you will come into a significant amount of money that would allow you to make a large payment or full repayment, or, if you are selling your home in the near future. |
| Interest |
Interest is calculated half-yearly, not in advance. |
| Features |
1,2 & 3 year terms. Completely open for repayment. Due and payable upon sale of property or transfer of ownership. Maximum amortization of 25 years. |
| How to pay it down faster? |
As much as you want, or can afford, at any time. |
| Type |
Fixed Rate Closed Mortgage |
| Right for you? |
If you don’t foresee repaying the entire mortgage any time soon, but want to pay-down more quickly and enjoy a lower rate. |
| Interest |
Interest is calculated half-yearly , not in advance. |
| Features |
6 months to 5 years for first mortgage, 1 to 5 years for second mortgage. Refinanced only at the Credit Union’s option, assumable and por table to qualified borrowers. Maximum amortization of 25 years. |
| How to pay it down faster? |
25% of original fixed principal may be repaid on anniversary date. Payments may be up to doubled on any regularly scheduled payment date. |
| Type |
Variable Rate Mortgage |
| Right for you? |
If you enjoy keeping an eye on interest rate activity and feel confident that interest rates will remain low. |
| Interest |
Rates will fluctuate based on current prime, calculated monthly, not in advance. |
| Features |
Available on first and second mortgages. Due on demand (no formal due date, no annual renewal fee). Due and payable upon sale of property or transfer of ownership. Payments will not normally change during the year. Payments will be adjusted on the anniversary date of the mortgage, if necessary, based on the then current rate and the remaining amortization period. Maximum amortization of 20 years. |
| How to pay it down faster? |
Completely open, so you can pay-down or prepay at any time. |
| Type |
Construction Mortgage |
| Right for you? |
If you are having your home custom built by a reputable, bonded General Contractor who is covered by the Ontario New Home Warranty Program. |
| Interest |
Rates will fluctuate based on current prime, calculated monthly, not in advance. |
| Features |
Building plans must be appraised by an accredited appraiser for ‘when completed’ value and building plans must be supplied to the Credit Union. The construction phase must be less than one year and equity in the project is at least 25%. |
| How to pay it down faster? |
Completely open, so you can pay-down at any time. |
| Type |
CMHC/Genworth/AIG United Guaranty High Ratio Mortgage |
| Right for you? |
If your mortgage amount exceeds 75% of the appraised value or purchase price of the home, you will need mortgage insurance. |
| Interest |
Fixed rate open, fixed rate closed, variable rate options. |
| Features |
Insurance protects mortgage lenders from losses resulting from borrower default. All terms and conditions subject to the Credit Union and insurers policies and procedures. Available on principal residence only, including condominiums. Maximum amortization of 35 years fixed or variable rate. |
| How to pay it down faster? |
Depends on the mortgage type option chosen. |
| Type |
MeritLine® Home Equity Line of Credit |
| Right for you? |
If you need to leverage the equity in your home for other big purchases, such as renovations or your child’s education. The amount available is revolving, resulting in a larger line of credit. |
| Interest |
Rates will fluctuate based on current prime, calculated monthly, not in advance. |
| Features |
Once approved, you have access to your home’s equity and do not need to re-apply. Allows you to take advantage of interest rates lower than regular credit cards. Maximum amortization of 20 years. |
| How to pay it down faster? |
Interest payments due on a monthly basis. Principal payments can be applied to MeritLine® at any time. |
*Terms, conditions and product options subject to change at any time.
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