Getting Your Mortgage

Even if you have a pre-approved mortgage certificate, you must still meet with us during the conditional offer period to get a final mortgage approval.

To ensure that the process goes smoothly, make sure you bring:

  • A copy of the property listing; and
  • A copy of the signed Offer to Purchase

We will update/verify your financial information, and put together the information required to complete the mortgage application. We may require an appraisal and/or a survey or title insurance. We will also inform you about the various types of mortgages, terms, interest rates, amortization periods and payment schedules available. Depending on your down payment, you may have a conventional or high-ratio mortgage.

CONVENTIONAL MORTGAGE

A conventional mortgage is a mortgage loan that does not exceed 75% of the lending value of the property. The lending value is typically the lesser of the property’s purchase price and market value. Your down payment is at least 25% of the purchase price or market value.

If you contribute less than 25% of the home price as a down payment you will need a high-ratio mortgage. This type of mortgage requires mortgage loan insurance, of which CMHC is a major provider. You may elect to have the insurance premium added to your mortgage or to pay it in full upon closing.

FIXED, VARIABLE OR ADJUSTABLE INTEREST RATE

Mortgage interest rates are either fixed, variable or adjustable. A fixed rate is a locked-in rate that will not increase for the term of the mortgage. A variable rate fluctuates based on market conditions while the mortgage payment remains unchanged. With an adjustable rate, both the interest rate and the mortgage payment vary based on market conditions.

CLOSED MORTGAGE

A closed mortgage may be a good choice if you’d like to have a fixed payment that will allow you to adjust your budget to your new lifestyle. However, closed mortgages are not flexible and there are penalties or restrictive conditions attached to prepayments or additional lump sum payments. It may not be the best choice if you decide to move before the end of the term or if you want to benefit from a potential decrease of interest rates.

OPEN MORTGAGE

This type of mortgage is flexible and can usually be pre-paid by any lump sum or paid off at any time without penalty. An open mortgage can be a good choice if you plan to sell your home in the near future or to pre-pay with large lump sums. You may convert to a closed mortgage at any time, although you may have to pay a small fee.

CREDITMASTER®

You can choose variable, fixed or both – securing different loan agreements and terms under a single CreditMaster® mortgage.

There are other benefits too:

  • Grow your borrowing power as you pay down your mortgage.
  • Attach new term loans or a home equity line of credit (HELOC) without ever having to pay additional legal fees.
  • Borrow using the low mortgage rates you’ve already secured, or negotiate
  • separate rates and terms entirely.
  • Use the growing equity in your CreditMaster® to fund additional borrowing needs throughout your life, while saving money.

If you’re like most people, the mortgage on your home is your largest single investment and your most valuable asset. It should be working for you while you’re building equity.

Flexible and Fantastic

A re-advancaeble mortgage is the most flexible and convenient way to make that happen, allowing the equity in your home to save you thousands of dollars. You can use your equity to renovate your home, purchase another property, pay for your child’s education, purchase other assets, or even to save money by consolidating high-interest debt.

Unlocking the equity in your home with a CreditMaster® mortgage gives you access to a number of borrowing options best suited to your specific needs. Essentially, this is the last mortgage you will ever need!

As the equity in your home increases, future loans can be made under the CreditMaster® mortgage without the need (or legal cost!) of registering another mortgage.

All advances are based on your home’s current appraised value, and an unlimited number of loans, including lines of credit, can be created under one mortgage. This provides the options that really matter to you – options that adapt to your family’s changing financial needs.

The Choice is Yours

Some other important things to know about the CreditMaster® re-advanceable mortgage:

  • It can be used for conventional and high ratio home equity residential mortgages as well as conventional construction mortgage financing;
  • It can be customized to suit your individual needs for any length and any type of mortgage offered by LVCU; and
  • It can be segmented to get maximum advantage from blending low short-term interest rates with long-term rate stability.

Imagine the Possibilities

The CreditMaster® Mortgage offers maximum convenience from the start – plus more power to pursue your dreams as you build equity. It’s hard to imagine that you can be a responsible borrower at the same time that you are borrowing against your equity. But when you put your home to work for you, the equity becomes the leverage you need to maximize your financial position.

Are you looking to get the most from your mortgage? You’re not alone. CreditMaster® is a different kind of mortgage. Flexible and re-advanceable, it builds your borrowing power as you pay down your mortgage and property values increase. In other words, the money you put into your mortgage today is money you can still use tomorrow. Stuck choosing between a fixed and variable rate mortgage? With CreditMaster®, you can attach multiple loan agreements to your mortgage. Pay less while doing more. That’s CreditMaster®.

TERM

We will also tell you about the term options for the mortgage. This is the length of time that the mortgage conditions, including interest rate, will stay the same. It can vary from six months to 10 years. Choosing a longer term (for example, five years) gives you the chance to plan ahead and protects you from interest rate increases while you adjust to homeownership. Weigh your options carefully and don’t be afraid to ask us to work out the differences between one, two, five-year or longer terms.

AMORTIZATION

This is the amount of time over which the entire debt will be repaid. Many mortgages are amortized over 25 years, but may be as long as 30 years. The longer the amortization, the lower your scheduled mortgage payments, but the more interest you pay in the long run.

PAYMENT SCHEDULE

A mortgage loan is normally repaid in regular payments, either monthly, biweekly or weekly. Payment schedules that are more frequent can save some interest costs by reducing the outstanding principal balance more quickly than with monthly payments. The more payments you make in a year, the lower the overall interest you have to pay on your mortgage. Keep in mind that mortgages may have important payment features that can save you money and let you be mortgage-free sooner.

WILL YOU HAVE TROUBLE QUALIFYING?

If your calculations show that you will have trouble meeting YOUR monthly debt payment along with a mortgage payment, and that you will likely have trouble getting approved for a mortgage, the first thing you should do is to come in and talk with us.

We can offer options and advice that may include:

  • Pay off some debt first;
  • Save for a larger down payment;
  • Revise your target house price;
  • Meet with a credit counselor who can help you minimize your debts; or
  • Buy your home through a rent-to-own program provided by the builder, a nonprofit sponsor or a government sponsor.

THE IMPORTANCE OF YOUR CREDIT RATING

Before approving you for a mortgage, we will want to see how well you have paid your debts and bills in the past. To do this, we simply get a copy of your credit history (credit report) from a credit bureau. This provides us with information on your financial past and use of credit.

Before we see your credit history, you should get a copy for yourself to make sure the information is complete and accurate. Simply contact one of the two main credit-reporting agencies (Equifax Canada Inc. or TransUnion of Canada) to get a copy of your credit report. There may be a fee for this service.

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© 2013 Lake View Credit Union