When you use mortgage default insurance to get a mortgage, lenders will loan you more money with as little as 5% down payment and give you their best mortgage interest rates.
If you're buying or refinancing a home and are borrowing more than 80% of the home's value, the mortgage must be insured.
Mortgage default insurance can make a big difference in how quickly your mortgage loan is approved and to the size of home you can afford.
Would mortgage default insurance apply to your situation? If you are trying to get a mortgage for your first home, then this is absolutely of interest to you. Here's why:
√ Lenders willing to offer mortgages even with a low down payment
Mortgage default insurance is a win-win solution for both home buyers and lenders. Lenders rely on mortgage default insurance to protect themselves from financial losses in case a loan is not repaid. Because lenders have this protection, they are willing to offer loans with very low down payments - as little as 5% of the loan amount - and with best rates.
√ Buy more house with a given down payment
For loans without mortgage default insurance, most lenders require a down payment of 20% of the purchase price. That's a lot of money, especially in today's housing market of fast-rising prices. Mortgage default insurance allows you to start enjoying the benefits of homeownership when it is financially right for you.
How Default Mortgage Insurance Works
If you have less than a 20% down payment or existing equity when you refinance, you'll pay a non-refundable mortgage default insurance "premium" which can be added to your mortgage. This premium will be based on the percentage you borrowed of your home's total value. There are many types of mortgage default insurance products, allowing you to buy a home with a very low down payment. For first time home buyers, mortgage default insurance can absolutely help you achieve your homeownership dreams. CMHC, Genworth, and Canada Guaranty insure mortgages, which are portable, assumable and assignable. Ask us more about the features and benefits of our mortgage default insurance products
(By the way - mortgage default insurance protects only the lender and is not the same as life or disability insurance, which would protect you or your family.)
