» What is a mortgage?
» What is CMHC mortgage insurance?
» What are the terms for mortgages?
» May I pre-arrange my mortgage?
» Why is mortgage pre-approval important?
» What documents are required for pre-approval?
» May I switch my mortgage from another lender to
   Envision Credit Union?
» How can I save money on my mortgage?
» Is any mortgage protection insurance available?
» What are the other costs of a home purchase?
» May I use my RRSP to make a down payment?

What is a mortgage?

A mortgage is loan you use to purchase a home-or some other piece of property. The amount you borrow is called the principal and each mortgage payment is a combination of principal and interest. The property remains in the possession of the borrower, but it may be re-claimed by the lender if the loan and interest are not paid as agreed.

What is CMHC mortgage insurance?

If the amount of your mortgage is more than 75% of either the purchase price or the appraised value of the property (whichever is lower), the mortgage is considered high ratio. To comply with legal requirements, you must purchase mortgage insurance. Mortgage insurance is available from Canada Mortgage and Housing Corporation (CHMC).* An application fee and an insurance premium also apply, which you can add to the mortgage amount. More information is available here.

*Some conditions apply. For further details and the
  conditions required, please see a mortgage specialist
  at an Envision Credit Union branch near you.

What are the terms for mortgages?

Mortgages are available with a fixed rate of interest for various terms, ranging from six months to 10 years, with payments amortized over periods of up to 25 years. We also offer variable rate mortgage options. Call or stop by for more information.

May I pre-arrange my mortgage?

Based on your financial situation, we can pre-approve a maximum amount of mortgage financing at a specific rate for a period of 60 days (90 days for new construction). You will know, without obligation, the amount you can borrow, the interest rate, and your payments.

To apply or for more information call or visit your nearest Envision Credit Union branch to set up an appointment.

Why is mortgage pre-approval important?

Mortgage pre-approval is important for a number of reasons:

• It determines the maximum mortgage loan for which you qualify.
• It allows your realtor to show you a range of properties in your price range.
• It allows your realtor to make a realistic offer on your purchase, and saves time in the negotiation process.
• It holds the interest rate for a period of 60 days (90 days for new construction), guarding you against rate fluctuations.
• It provides peace of mind during the home-buying process.

What documents are required for pre-approval?

• Income confirmation. This will be used to determine how large a mortgage payment you can handle. Income confirmation documents can include a letter from your employer, T4 slips, financial statements, and Revenue Canada assessments.
• Down payment confirmation. This will be used to confirm the difference between your proposed purchase price and the amount of the mortgage loan. Your down payment can include saved funds on deposit with your financial institution, RRSPs, a gift from an immediate family member, and/or equity from the sale of another property.
• Credit application. The credit application will provide us with information we need assess your mortgage request and net worth. It will also let us request a credit bureau check.
• Credit confirmation. We'll do a credit investigation and confirm that your credit rating is acceptable for a mortgage.

May I switch my mortgage from another lender to Envision Credit Union?

Yes. If you already have a residential first mortgage on your home with another approved lender, you may switch your mortgage to Envision Credit Union. Certain conditions, however, may apply. Simply ask us to assist you.

How can I save money on my mortgage?

The easiest way to reduce the interest costs on your mortgage is to pay it off sooner. Here's how:

• Pay weekly or biweekly. Making your mortgage payments earlier and more frequently through weekly or biweekly payments can save on interest compared with monthly payments.
• Choose a shorter amortization period.

Example
This comparison shows how you can reduce your amortization period and save on interest by choosing a more frequent payment schedule.

Mortgage amount of $100,000 at 7.0% interest, calculated on a declining balance:

	Monthly Payments	Weekly Payments
Payment per period	$700.42	$175.11
Total annual payments	$8,405.04	$9,105.72
Total interest	$110,126.00	$86,667.26
Amortization period	25 years	20.5 years

In this example, weekly payments can save you $23,458.74 and almost 5 years on your mortgage.

• Prepay. You can prepay up to 15% of the original principal amount of your mortgage anytime during each year of the term of your mortgage-without penalty or an administration fee.
• Increase your monthly payments. Once per year, during the term of your mortgage, you can increase your monthly mortgage payments up to 100% of the monthly payment originally established for the current term of the mortgage-without penalty or an administration fee.

Is any mortgage protection insurance available?

The following optional mortgage insurance is available to you to help you feel more comfortable with your home purchase:

• Mortgage life insurance
• Mortgage disability rider
• Mortgage Loss of employment rider
• Mortgage Critical illness insurance

What are the other costs of a home purchase?

The other costs associated with the purchase of a home may include the following:

• Inspection fee-required if a professional is to inspect the house prior to the completion of the purchase 
• Appraisal fee-required to ensure the property is acceptable security for the mortgage 
• Legal fees-includes lawyer's or notary's fees plus any disbursements required to transfer the property and register the mortgage 
• Survey certificate fee-required to ensure the house is positioned on the lot within legal restrictions 
• Tax adjustments-you will be responsible for paying the taxes for the portion of the first year that you own the property 
• Mortgage insurance-if the down payment is less than 25% of the purchase price, an insurance premium on the mortgage amount is required (it may be added to the mortgage amount) 
• Home insurance-arranged to cover the property in the event of fire or other damage
• Mortgage protection insurance-optional, but is available to cover the mortgage amount in the event of death, disability, loss of employment, or critical illness 
• Moving costs-vary depending on how far you're going and who is helping you move

May I use my RRSP to make a down payment?

A federal government plan allows first-time homebuyers to use their RRSPs to help finance their home purchase. This money can be used as a down payment, or to help with other closing costs. RRSP home ownership withdrawal forms are available from your RRSP holder. The criteria are as follows:

• Each applicant can withdraw up to $20,000
• Applicants cannot have owned a principal residence within the past 5 years, unless it was a revenue property
• You must reside in the home for at least one year 
• The RRSP funds must have been invested for more than 90 days before withdrawal to qualify 
• The withdrawn amount must be repaid, over an interest-free repayment period that can be as long as 15 years

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