The newest member of the Clinton Wilkins Mortgage Team is Lesa Orr, who joins the team as a Mortgage Advisor! Meet Lesa!
There is a lot of confusion about what Mortgage Loan Insurance is and what it is for. So I wanted to spend a little bit of time trying to explain. The best way I think to do this is to start with what it is not:
Mortgage Loan Insurance is not life insurance.
Mortgage Loan Insurance is not house (fire) insurance.
Its purpose is to protect a bank’s interest in the event that they cannot collect the full amount owing to them for your mortgage. This insurance offsets the risks associated with lending large sums of monies with little to no equity. In turn, this makes home ownership possible for people who otherwise may not have had access.
The rate that is paid is determined by the amount used as a down payment, mortgage program, and property type ranging from 0.6% to 5.45% of the mortgage amount for amortization periods up to 25 years. These monies can be paid as a lump sum, but are more often tacked onto the mortgage balance at closing.
There are three insurers in Canada: Canadian Mortgage and Housing Corporation, GENWORTH Canada (Now Sagen), and Canada Guaranty. Each of their programs varies slightly, and some offer incentives to home buyers for taking action to improve their homes!
If you are interested in finding out more about mortgage loan insurance, contact us and we would love to chat more with you.