You’ve finally found your dream home, and you want to make it yours. The combination of rising home prices, increasing taxes and unforeseen expenses related to home ownership can make saving for a 20 percent down payment very difficult. Consider mortgage insurance, and with help from a mortgage broker, your dreams of home ownership are well within reach.
Do I need mortgage insurance?
Mortgage default insurance is sometimes called “high ratio” insurance. It offers you affordable options for purchasing a home. It could help you buy a home sooner and with a lower down payment. Qualified borrowers can purchase a home with as little as five per cent down payment.
Mortgage insurance protects the lender and bank, trust company, or credit union – not the homeowner – from losses related to borrower default and foreclosure. The cost of this insurance depends on two things: the type of mortgage applied for and the amount of the down payment.
Canadian insurance companies
In Canada, there are three insurers:
- Canada Mortgage and Housing Corporation (CMHC),
- Genworth Canada, and
- Canada Guaranty.
Your mortgage broker can provide you with specific premium costs and benefits of using mortgage insurance for your unique loan.
What kind of insurance do I have?
Mortgage insurance is often confused with other types of insurance associated with owning a home. Knowing the difference will help you understand what coverage is appropriate for your specific needs.
Mortgage default insurance is not the same as:
- Homeowner/Property Insurance: A form of property insurance designed to protect the individual’s home (or possessions in the home) against damages, including loss, theft, fire, or other unforeseen disaster.
- Mortgage Life Insurance: A type of insurance designed to repay any outstanding mortgage debt in the event of homeowner death or long-term disability.
Contact us today to find out how you could benefit from mortgage insurance.
