What is Mortgage Loan Insurance?
In Canada, we have the amazing opportunity to purchase a home with as little as 5% down of the purchase price. In order for Canadians to take advantage of this we needed Mortgage Loan Insurance.
Direct from the CMHC website: http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_010.cfm
Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20% down payment.
To obtain mortgage loan insurance, lenders pay an insurance premium. Typically, your lender will pass this cost on to you. The premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments.
As yourmortgagegirl, I would be happy to answer any questions you have regarding mortgage insurance and see how it factors into your next mortgage.
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