UCU Mortgage Primer for First Time Home Buyers

You’ve heard it before – buying a home is the single largest, long-term purchase you will likely make in your lifetime. So if you are thinking about buying a home - it is important to learn as much as you can about the mortgage process before you start your home buying journey. Knowing what to do and what to avoid - will better position you to get the best mortgage tailored to your specific financial situation.

Here are some tips to help you get the best mortgage package for your new home:

Know Your Credit Score

Your credit score will determine whether or not you qualify for a mortgage. A bad credit score may signal you are less likely to qualify for a mortgage while a high score may unlock better interest rates for your mortgage.

There are two main credit bureaus in Canada: Equifax and Transunion. Contact one to request your credit report.

Get Pre-Approved

Apply for a mortgage pre-approval first - before you start your home search. With a mortgage pre-approval in hand, you will know to the top end of your price range – which will allow you to make an informed home purchase that will fit within your budget.

UCU mortgage pre-approval is quick and easy – just call your local UCU Branch and speak to a mortgage specialist who will provide you with expert advice.

Aim for a 20% Down Payment

A down payment is the amount of money you pay upfront when you buy a home – it is calculated as a percentage of the purchase price. Your mortgage will be based on the remaining amount of the purchase price.

You could put down as little as 5% of the purchase price and as much as you could afford on the high end. But keep in mind that a down payment of less than 20% means you will have to buy a high ratio mortgage insurance premium which will increase your monthly payments.

Don’t Forget Closing Costs

On average you will need up to 2.5% of your home purchase price to cover closing costs. This includes the cost of land transfer taxes, PST, home inspection fees, legal fees, appraisal fees, property tax, property insurance, fire insurance, utility hook-ups and possible mortgage insurance.

The closing costs are in addition to the home purchase price – so put aside some money to cover the fees.

Interest Rate Options

You have two choices when it comes to how interest rates are calculated on your mortgage: fixed-rate or variable rate.

A fixed-rate mortgage – the interest rate of the mortgage will remain the same until the mortgage comes up for renewal - even if the interest rates change during your mortgage term.

A variable mortgage - the interest rate of the mortgage will fluctuate throughout the term. The prime interest rate is determined by the Bank of Canada and the variable mortgage rate is set by each financial institution’s prime rate.

Mortgage Payment Schedules

You chose a payment plan that suits your financial needs which could include setting up automatic payments from your account. UCU offers several payment plan options from paying once a month, twice a month, every two weeks, or even once a week. You have the flexibility to choose a rapid pay-down option to pay off your mortgage sooner.

Mortgage Pay Back Period

The typical amortization period for a mortgage is 25 years – but you can choose a shorter amortization or a longer one of up to 30 years.

Longer mortgage re-payment plans mean smaller monthly payments but you will end up paying more interest during the length of your mortgage. Shorter mortgage re-payment plans mean larger monthly payments but you will end up paying less interest during the length of your mortgage.

Mortgage Terms

A mortgage term is a period in which you are locked into a selected mortgage rate. Mortgage terms vary from a 6-month term up to a 5-year term. Once the term expires you will have to renegotiate the terms of your mortgage – you can keep your current term or select a different mortgage term option.

 Mortgage Types

There are two mortgage types to choose from: open mortgage or closed mortgage.

Open Mortgage – Allows you to increase your mortgage payments – by either paying more in each installment or by making a lump sum payment. You can pay off your mortgage sooner without penalty but your interest rate will be higher.

Closed Mortgage – Offers lower interest rates and you are limited by how much extra you can pay towards your mortgage each year.

UCU Mortgage Specialists

Our UCU mortgage specialists provide customized solutions and advice – to serve you and all our Members with the highest quality mortgage service available including mortgage pre-approval.

More information about mortgages and mortgage rates can be found on the UCU website.

Home Office – the New Must-Have Renovation

Over a year ago the COVID-19 pandemic forced the shutdown of our economy changing the way we work and learn. Many families had to juggle working from home with remote learning for their children - creating a need for a separate home office space that can provide a quiet place to work and a professional backdrop for Zoom calls.

Work from Home is Here to Stay

Many indicators point to the work from home trend to continue beyond the pandemic – becoming a viable work choice option.  

A recent survey by Statistics Canada found that a third of Canadians were working from home during the pandemic - up dramatically from 4% in 2016.

Stats Can also project that 60% of Canadians with university degrees will have jobs with the technological capabilities to work from home – making a home office a necessity.

Home Office Adds Value to Your Home

Having a well-designed, purpose-built home office is important to provide a flexible work option for you or a remote learning space for your child. And it could also add value to your home.

As more people opt to work from home it’s no surprise that a home office is quickly becoming an important feature for many of today’s home buyers.

Finance Any Home Improvement Project with a UCU Home Renovation Loan 

Looking to add a home office, remodel your kitchen or update your bathroom? Do you need to replace a refrigerator or repair a leaky roof? Before you reach for your credit card to pay for your home improvement project, consider a UCU Home Renovation Loan instead.

Use a UCU Home Renovation Loan to finance any home improvement purchases you would make using your credit card.

• Apply for a UCU Renovation Loan to help:
• Apply for a UCU Renovation Loan to help:
• Build a home office
• Renovate your kitchen
• Update your bathroom
• Refresh your house with a new coat of paint
• Repair your roof
• Replace your dishwasher, refrigerator, or stove
• Replace your windows
• Repave your driveway
• Any other home improvement project

UCU Home Renovation Loan Advantages

There are many advantages to financing your home improvement projects with a UCU Home Renovation Loan, including:

Lower Interest Rates

UCU Home Renovation Loans typically have lower interest rates than credit cards. If you plan to carry a credit card balance to pay for your purchase, then you will pay less in interest if you opt for a UCU Home Renovation Loan instead.

That could mean a lower overall cost to your home improvement project.

Pre-Approved Loans up to $30,000

UCU has made applying for a Home Renovation Loan quick and easy with no upfront application fees.

Just visit your local UCU Branch and provide some basic financial information, including proof of employment.  A UCU Loan Specialist will then conduct a credit check to determine your credit score. A better credit score means lower interest payments on your UCU Home Renovation Loan.

With pre-approved loans up to $30,000, you can borrow a lot more money for your home improvement project than you could with a credit card.

Fixed Monthly Payments

UCU Home Renovation Loans come with affordable monthly payment options that will suit your budget.

You will have up to five years to repay your loan, with your choice of weekly, bi-weekly, semi-monthly, or monthly payment schedules.

You can even set up an automated payment plan from your UCU Chequing Account for a more convenient repayment solution.

Improved Credit Score

Running up your credit card with expensive purchases could hurt your credit rating. If you repeatedly use up your available credit on a single credit card, that could lower your credit score. You could be viewed by creditors as not using your credit responsibly.

Taking out a UCU Home Renovation Loan for your home improvement project could free up your available credit on your credit card and preserve, or even improve your credit score.

Personal Loan Insurance Premium Protection

You can purchase personal loan protection insurance for your UCU Home Renovation Loan. Life, disability and critical illness insurance can help protect you from an unforeseen event, by paying the outstanding balance of your loan in the event of illness or death, or by making your regular loan payments in the event of a disability. Conditions apply and the cost of the premiums will be added to your loan repayment schedule.

More information about UCU Home Renovation Loans can be found on the UCU website.

Visit your local UCU Branch to apply.

eTransfer Limit Increase

 

You asked and we listened - You can now send more money safely and securely using UCU Interac eTransfer.

Put away your chequebook - UCU has made it easy for you to send, receive and request money online and on your mobile app.

You can now send up to:

·         $10,000 per transaction

·         $300,000 per 7 day period

·         $900,000 per 30 day period

More information and a full list of eTransfer limits can be found on the UCU website.

New to eTransfer

Learn how you can send an eTranfer to anyone, anytime by watching the UCU tutorial.

Debit Card tap limit increase for UCU Members

 

What you need to know

Starting June 3^rd, your debit card contactless/tap limit will increase to $250 for merchant purchases - up from the previous $100.

What you need to do                                     

·         Perform 3 consecutive Point of Sale (POS) transactions by entering your PIN on the terminal keypad

·         After the third consecutive transaction, your UCU Debit Card will be updated and you can tap for purchase up to $250

More information can be found on the UCU website