Report: New Mortgage Rules Keeping You From The Home of Your Dreams?
Not at Meridian!
The mortgage market has absorbed a significant amount of change over the past several years with the most recent update being introduced in January 2018. Among these changes is the requirement for federally regulated financial institutions to introduce a qualifying rate for applicants that can be 2 per cent higher than the rate being offered. As you can imagine, this makes qualifying for your dream home much more difficult.
Meridian, a provincially regulated institution, is not effected by these recent changes. It continues to see strong momentum within the mortgage market and its approach has not changed. Meridian always includes a member-focused attitude that embraces proactive financial advice with engaging dialogue that places financial well-being and, by extension, well-being in general at the forefront. This remains at the heart of what Meridian does.
Therein lies the Meridian difference, not only for its existing members, but for all residents of Ontario. Members can continue to look at moving into the home of their dreams and feel secure that the Meridian collaborative and practical approach will balance what they desire with what they can afford.
Here are some tips and advice that will help you become a successful homeowner.
Save for a down payment: Saving up a significant down payment is extremely important, as it will help to cut down mortgage payments going forward. You should save up at least 5 per cent of the price of the home for a down payment. Saving 20 per cent or more will help you to avoid mortgage insurance or having to be approved at the prescribed Bank of Canada rate.
Calculate your initial costs: Aside from your down payment, you have to factor in closing costs, moving costs, lawyer fees and taxes. So you aren’t surprised later, the general rule of thumb is to add 1.5 to 2 per cent of the total purchase price to cover closing costs.
Get pre-approved: Work with a trusted mortgage specialist to make your first home buying experience easy and well planned. When getting pre-approved, make sure that you are accounting for all your monthly expenses, such as contributing to a savings account. Life has a way of changing at just the wrong time so it is good to have some financial wiggle room for unexpected events.
Know your options: It’s important to know that a first-time homebuyer includes anyone who has not owned a home in the past seven years. The Canadian government is currently offering a First-Time Home Buyer Tax Credit, up to $750, which you can later put towards a mortgage payment. It allows first-time homebuyers to borrow up to $25,000 from their Registered Retirement Savings Plans tax-free to fund their purchase.
MERIDIAN For further information and to find out more about home mortgages and all your other financial needs, visit the website.