You’re probably familiar with the concept of a mortgage, but what about an insured mortgage? An insured mortgage is one that is covered by what is called mortgage default insurance. You pay for this insurance as the borrower which helps to protect you against default and foreclosure.
Why get an insured mortgage?
So, why exactly might you go for this type of mortgage over a regular one?
The simple answer to this question is that it adds security and allows you to get lower rates or better mortgage options even though your down payment amount might be lower. You really can’t go wrong with added security!
Who offers mortgage default insurance?
If you’re looking for mortgage insurers, there are three in Canada that you can choose from:
· CMHC: This is a Crown corporation that is the most well-known
· Genworth Financial
· Canada Guaranty
You can ask your lender to arrange for the purchase of your mortgage insurance based on the provider that they use.
How do I pay for my mortgage insurance?
If you do choose to go for mortgage insurance you can choose between transactional insurance, referred to as a high ratio mortgage, or portfolio insurance or bulk insurance. Transactional insurance is a one-time premium and can be paid either as a lump sum or can be added to your mortgage payments.
Portfolio insurance is paid by the lender and isn’t something that borrowers are aware of.If mortgage insurance sounds like the right choice for you, then it’s a great idea to learn more about it and work with an expert that can lead you in the right direction. Get your questions answered and get started today by contacting us! We’re eager to help you get the right mortgage for your needs.