Buying a home comes with a hefty price tag, which is why mortgages exist. But getting approved for a mortgage you can afford can be difficult, especially if you’re a first-time home buyer working without the proceeds from selling your previous home.
That’s why it’s important to have a mortgage specialist in your corner to help you throughout the mortgage application and approval process.
Canada’s big banks might be obvious sources for mortgages, but they’re not the only ones. Credit unions could be a better option for buyers, particularly first-timers. As a member of a credit union, you may be able to take advantage of more personalized service and may even benefit from more affordable options.
How Meridian Can Help First-Time Home Buyers In Ontario
Many Ontarians prefer to deal with credit unions like Meridian for a few reasons; namely, they typically offer competitive financial products and rates with a Member-centric approach to meet your needs. Learn more about how Meridian can help you as a first-time buyer.
First-time home buyers may want to consider Meridian’s mortgages. Here are a few ways that Meridian can help first-time buyers apply for a mortgage.
Multiple Mortgage Options
Meridian offers first-timers several mortgage options to choose from, including fixed-rate and variable-rate mortgages, high-ratio mortgages, and self-employed mortgages.
Affordable Interest Rates
Meridian’s organizational structure allows them to offer more competitive rates than what you may find at traditional banks. And with a lower rate, you can save tens of thousands of dollars or more over the life of your mortgage.
Meridian offers a variety of tools to help first-time homebuyers start off on the right foot, including online mortgage calculators to estimate monthly mortgage payments and educational articles to help inform buyers before they make any major financial decisions.
Types Of Mortgages Offered By Meridian
Meridian offers first-time homebuyers a variety of mortgage programs to choose from, including:
Lock in your mortgage interest rate with a fixed-rate mortgage. Regardless of whether the Meridian prime rate changes, your rate will remain fixed, and as such, your mortgage payments will stay the same. This makes budgeting easier.
Unlike fixed-rate mortgages, variable-rate mortgages come with more flexibility in terms of interest rates. Since mortgage rates are tied to the prime rate, they’ll fluctuate along with it. So when the prime rate is low, a larger percentage of your mortgage payment will go towards your principal. But when rates are high, a larger portion of your mortgage payment will go towards interest.
High Ratio Mortgages
These mortgages involve loan amounts that are more than 80% of the appraised value of the home. First-time home buyers might find high-ratio mortgages more appealing and easier to apply for because they don’t have to come up with a sizable down payment.
This type of mortgage is a loan that is used to cover the cost of making improvements to your home. The mortgage amount is advanced to you in stages as the different phases of your home’s renovations take place. The specific mortgage type, interest rate, and term will depend on several factors, including the amount of construction needed and how long the construction will take to complete.
First-time homebuyers who are unable to qualify for a traditional mortgage may find a hybrid mortgage more appealing. A hybrid mortgage combines a loan with a conventional mortgage, making it easier to get approved for a home loan. Future borrowing potential will be assessed, giving buyers the chance to buy a home today and transition into a conventional mortgage later, when their finances are more stable.
Self-employed buyers who often have fluctuating income might find it more difficult to get approved for a mortgage, as they will have to provide more documentation to prove their financial stability. A self-employed mortgage from Meridian can help these buyers afford a home or refinance a mortgage.
The Friends and Family Mortgage from Meridian allows up to 4 people to apply for a mortgage together, making home-buying more affordable.
Meridian Mortgage Features
Buyers can expect the following features when applying for a mortgage with Meridian:
- 20/20 Prepayment. With this feature, you can make a 20% prepayment every year to help pay off your principal amount faster.
- Skip a payment. If you have a bad month and are finding it difficult to come up with the money to cover that month’s mortgage payment, Meridian’s skip-a-payment feature allows you to miss that month without being penalized. You can do this once every 12 months with no repercussions.
- Flexible payment options. You have options when it comes to how frequently you’d like to make your payments, including weekly, bi-weekly, monthly, or bi-monthly. You can also speed things up a little with accelerated weekly or bi-weekly payment options.
- Mortgage protection. Buyers are protected by the CUMIS Group Mortgage Protection (GMP), which protects your home in the event that your family struggles financially as a result of your death, disability, or serious illness. This protection comes at a monthly premium.
- Hold your rate for 120 days (for standard mortgages). Any advertised rate will be held for you for 120 days, unless otherwise stated, with no further commitment required on your part.
Meridian Mortgage Rates
The interest rate charged on Meridian mortgages depends on the exact type of mortgage and whether it’s a fixed-rate or variable-rate mortgage.
Meridian Mortgage Rates
The mortgage interest rate you are given depends on a few things, including the type of mortgage program you apply for. The following chart outlines the interest rates Meridian currently offers based on different loan types:
|Term||Rate||Discounted Rate||Open||Fixed Or Variable|
|5-Year Fixed (High Ratio)||6.29%||4.79%||No||Fixed|
|5-Year Variable (High Ratio)||6.25%||–||No||Variable|
How To Apply For A Mortgage With Meridian
Applying for a mortgage with Meridian is easy. Just follow these 3 simple steps:
1. Create an account
Provide a few pieces of information about yourself to get the process started. The advertised interest rate will be held for you when you create your profile for 120 days.
2. Complete your application
Your credit score will be provided at no charge, along with a list of documents that may be required to complete your application.
3. Get approved
After submitting your application, your final approval will be sent within a few days.
Things To Consider When Getting A Mortgage
Before applying for a mortgage, it’s important for buyers — including first-timers — to consider a few important factors, including the following:
Make sure that you have enough money available to cover closing costs that are due on the closing date. These costs are the expenses that need to be covered in addition to your down payment, deposit, and mortgage payments. They include things like land transfer taxes, real estate commission fees, loan origination fees, appraisal fees, home inspection fees, and title insurance.
The government offers several programs to help make finding a home more affordable for first-time buyers, including:
First-Time Home Buyer Incentive. This program makes it easier for first-time buyers to make a home purchase while reducing monthly mortgage payments through shared equity in which the government shares the upside and downside of the home’s value. Buyers can borrow 5% or 10% of the purchase price of the home, as long as they have the minimum down payment for an insured mortgage loan program.
First-Time Home Buyers’ Amount. The Canadian government offers a tax credit for first-time buyers that is designed to help reduce the costs associated with buying a home, including taxes, legal fees, and disbursements. Buyers can take advantage of a $5,000 income tax credit amount on a qualifying property purchased during that year.
First-Time Home Buyers’ Plan. First-time buyers can use up to $35,000 of their RRSP in a calendar year to purchase a qualifying home. The funds will have to be repaid in full within 15 years.
GST/HST New Housing Rebate. Buyers who purchase a newly constructed home will have to pay GST/HST on top of the purchase price. Builders typically include this tax in the purchase price, while others add it on top of the purchase price. Either way, the GST/HST New Housing Rebate allows buyers to recover all or part of this tax paid on new home construction or on a home that’s been substantially renovated.
Prepare Your Documents
You’ll need certain documents when applying for a mortgage, including:
- Photo Identification – No matter where you apply for a mortgage, you’ll need two valid photo IDs for identity verification. This includes your passport, driver’s license or any other government-issued photo ID.
- Financial Documents – When applying for a mortgage, you’ll need to prove you can afford to cover the administrative and closing costs. This is typically done by providing your bank statements.
- Proof Of Income – Additionally, you’ll need to provide proof of income and employment. You can do this by providing a letter of employment, a paystub and a T4 slip.
- Other Documents – You may also need to provide your lawyer information and a copy of the purchase agreement.
Can You Refinance A Mortgage With Meridian?
Yes, Meridian offers refinancing options for those who qualify. Refinancing means replacing your existing mortgage with a new one with a different interest rate and terms.
The most common reason to refinance is to take advantage of consolidating debts based on a lower interest rate. If the going rate today is much lower than the rate tied to your current mortgage, refinancing can help you take advantage of today’s lower rates and save you thousands of dollars over the term.
You can refinance your mortgage at any time throughout your term but you may be subject to applicable charges if you do it before the term expires. Another option to explore is to blend the mortgages, which avoids prepayment charges.
Flex Line Mortgage
If you have plenty of equity built up in your home, you can also refinance to tap into that equity as a line of credit. Meridian’s Flex Line Mortgage allows you to borrow up to 80% of the value of your home without having to re-apply for a loan.
You can pay off what you borrow any time, and when you do, you’ll be able to access more credit. You can use your home equity for anything, including home renovations, investments, or any other large expense you want to cover.
Meridian Mortgage FAQs
Can I get a mortgage pre-approval with Meridian?
What is the maximum total debt service (TDS) ratio Meridian will consider?
What is a convertible mortgage?
Is Meridian a Good Choice For a Mortgage Or Mortgage Refinance?
Meridian offers a variety of mortgage options to first-time homebuyers, along with tools and guidance from mortgage specialists to help buyers make more informed decisions about their home loans. If you’re a first-time home buyer in Ontario, Meridian can help you save money with lower rates.