Mortgage Blog
All about Mortgage Insurance
June 11, 2024 | Posted by: Sarabjit Dhuna
When you have less than 20% down payment then you need to have mortgage insurance that incurs premium however, there are several Benefits for insured mortgage as well.
Insured Mortgage Also called as High-ratio mortgage. The Federal required first time home buyer or next home buyer to have insured mortgage because of less than 20% down payment of the home price. The insured premium is based on down payment and size of the mortgage you make. Another reason is that insured Mortgage protect lender against foreclose or default. Insured Mortgage can also give few benefits to borrower like low rate and at renewal.
Advantages of Insured Mortgage: -
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You can buy home less than 20% down payment (sometimes less than 10%)
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You may get lower mortgage rate with flexible mortgage options
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Coverage and Premium can be modified as per your needs.
Lender will not take risk if there is no mortgage insurance
Minimum down payment requiring for insured Mortgage
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$500K or less than $500K – 5% of the price (require Insurance)
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$500K to 999,999 10% of the price (require Insurance)
Who can Offer Mortgage Insurance
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Canadian Mortgage and Housing Corporation
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Genworth
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Canada guaranty
How to Pay Insured Mortgage
The above companies provide 2 types of Mortgage Insurance 1) Transactional Insurance 2) Portfolio Insurance.
1) Transactional Insurance
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When the LTV is Higher than 80% then you have to pay one time premium which is already applied to Mortgages.
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It's very common to add this mortgage insurance in your mortgage
2) Portfolio Insurance
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It is also called Bulk Insurance.
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When the LTV is lower than 80% then this insurance can be used. Although, this is optional insurance for lenders.
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This insurance is paid by the lender and Borrowers are not even aware that insurance already purchased.
Lastly, Mortgage Insurances are not considered in Closing costs
If you are looking for Mortgage or any issues with Mortgage, then you can contact Sarabjit or you can visit our website Centum United Mortgage
If you are looking for any pre-construction property, then visit our website Own Ontario Home for new projects.
