Mortgage Insurance

Definition

  • An insurance policy taken out to protect a lender in case a homeowner defaults on his or her mortgage loan. In Canada, mortgage insurance is required on all mortgages with a loan-to-value ratio over 80%.
  • In Life insurance, a policy covering a mortgagor from which the benefits are intended (a) to pay off the balance due on a mortgage upon the death of the insured, or (b) to meet the payments on a mortgage as they fall due in the case of his death or disability. Also called "Mortgage Redemption Insurance."

Notes
CanEquity offers mortgage insurance.

Synonyms
supplemental mortgage insurance, loan insurance coverage, loan payment insurance policy, mortgage coverage, loan payment insurance

Related Terms and Acronyms

  • Canada Mortgage and Housing Corporation (CMHC) Company Est. 1946, Canada-wide, Very Important,
    • The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
    Insures Canadian mortgage lenders.
  • Declining Life Insurance Definition,
    • Life insurance with a decreasing death benefit, often used to insure mortgage debt.
  • Default Definition,
    • When a borrower fails to fulfill the obligations of a loan or lease.
  • Finance Charge Definition,
    • Charges that include all of the interest expected to be earned over the life of a loan, in addition to the service charges, mortgage insurance premiums, and other loan-related charges.
  • Foreclosure Definition,
    • The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
  • GE Capital Company,
    • GE Capital is the new CMHC alternative in the Canadian Mortgage Market place. GE Capital like CMHC provides banks/lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure GE Capital assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "CMHC."
    Also offers commercial financing.
  • Insurance (insur) Abbreviation,
    • An arrangement where one party provides financial protection to another party for specific damages or losses.
  • Low-down Mortgages Definition, Important,
    • Mortgages with a low down payment, usually less than 10 percent.
  • Low-down-payment Loan Definition,
    • A mortgage where the borrower puts down a small amount and borrows a high percentage of the purchase price.
  • Mortgage (mtg) Abbreviation, Important,
    • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • Mortgage Brokerage Definition, Very Important,
    • An individual or group who brokers deals between their clients and lenders.
    CanEquity is a mortgage brokerage.
  • Mortgage Disability Insurance Definition, Important,
    • Insurance that covers mortgage payments if a policyholder becomes disabled.
  • Mortgage Life Insurance Definition, Very Important,
    • Insurance that covers the costs of paying off a mortgage if the insured dies or becomes disabled.
  • Needs Approach Definition,
    • A way of determining how much life insurance an individual should purchase by examining the future obligations and needs of the beneficiaries.
  • No Money Down Mortgage Definition, Important,
    • Available in Canada as a true 100% mortgage financing product.
  • Property Insurance Definition,
    • Insurance that provides coverage for damages to property from a number of perils.
  • Single Interest Insurance Definition,
    • Insurance that covers a single party when more than one party has a stake in a property.
  • Zero Down Mortgage Definition,
    • A mortgage product that allows the borrower to financing 100% of their property.
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