Mortgage Blog
Everything about CMHC Insurance
October 10, 2024 | Posted by: Sarabjit Dhuna
There around more than 45% people in Canada used CMHC mortgage loan insurance to buy their first home. In this article, I will mention everything about CMHC insurance.
CMHC Insurance
CMHC (Canada Mortgage and Housing Corporation) is mortgage loan insurance federal crown corporation that help to protect lenders against mortgage default and also allow buyers to buy home with the down payment of less than 20% to 5%. Those who have down payment less than 20% then they must purchase this insurance to buy home.
CMHC Rules
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For price of the home at 500K or less (5% must require)
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For price of the home between 500K to 999,999 (5% for 500K and then 500K to 999,999 for 10%)
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For price of the home more than 1 million (No insurance available) till Dec 14
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After Dec 14 you can get insurance from 1 million to 1.5 million for less than 20% down payment.
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CMHC also need one of Borrower to have 680 credit score
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For the buyer, amortization period is 25 years.
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Mortgage stress test is important step in CMHC qualification Borrower must qualify for 5-year benchmark for bank of Canada and contract rate plus 2%. It means you have to prove that you are capable of paying higher interest rate to eligible for mortgage.
Special Case for CMHC - Self Employed program: - Offer More Flexible criteria to get approved for Mortgage
- Green Home: - Offer Refund for people who buy energy effiecient house.
- First time home Buyer: - Offer 5% or 10% put towards a down payment.
- Recommandation for getting approved for CMHC
- Improve Your Credit Score
- Deposit larger Down payment
- Steady Income
- There are other alternatives for CMHC which are Genworth and Canada Guaranty
- If you are looking for any types of mortgage services then contact us
