Owning a house is everyone’s dream. It’s not an easy dream to fulfill though. It brings along a big financial burden, if not planned well in advance. As per The Canada Mortgage and Housing Corporation, Mortgage insurance is compulsory while purchasing a house if the down payment paid is between 5% - 19.99% of house cost. Mortgage insurance is a safety blanket for buyers and sellers in adverse conditions.
What is Mortgage Insurance?
Mortgage insuranceprovides coverage to the lender in case the buyer is unable to pay instalments because of uncertainty like death, unemployment, accident, or disability. In Canada, if buyers are making less than 20% of the down payment then they have to buy mortgage insurance. It makes the deal less risky for the lender. There is a variety of mortgage insurance available in the market but you have to choose the most suitable plan as per your budget and requirement. Thorough research will be needed for that. You can buy mortgage insurance in Canada online by yourself or with help of a trustworthy and experienced insurance broker like MILIFE Insurance. Qualification for mortgage insurance depends upon your credit score and selected property location. Preparing in advance is the key.
Why Mortgage Insurance?
1. Equal opportunity for every Canadian to buy their own home
2. Less risk for lenders
3. Risk is transferred to the insurer
4. Interest rates will increase in absence of mortgage insurance in Canada
There is a lot of preparation required especially if you are buying property for the first time. Despite all the advanced preparation, there are chances of unexpected hurdles. You can take a loan from a bank or private lender. Bank has become strict with their lending rules, benefiting private lenders. Reasons for bank rejections are low credit scores, high debts, or self-employment.
Mortgage Insurance Checklist
1. Accurate evaluation of available finances and debts
2. Check credit score and plan accordingly
3. Shortlist lenders and mortgage plans
4. Check lending criteria
5. Accumulate all required documents in advance
6. Shortlist preferred location and property type
For calculating mortgage rate is also very important to plan your savings and manage your loans accordingly. A mortgage calculator helps you calculate the cost of insurance depending upon mortgage cost. You have put property cost and down payment amount in Mortgage Insurance Canada Calculator and it will give you a possible insurance premium. You can calculate the mortgage rates easily online.
MILIFE Insurance puts effort into understanding clients’ requirements, financial history, limitations, and budget. For first-time buyers, we are the right choice. We guide our clients in increasing their credit scores and getting the best mortgage rates. We try to simplify the insurance process as much as possible for our clients. Our advisors help you in choosing the most suitable plans and pass hurdles in the process.