The Benefits of Mortgage Insurance

There are many reasons why mortgage insurance can be of benefit to homeowners. Above all, it can be helpful those buying a home for the first time and those trying to live green. Having mortgage insurance can make lenders want to offer lower interest rates on your mortgage.

Weigh the options. Calculate what you will be paying in interest on a mortgage without mortgage insurance. After that, calculate what you will be paying monthly on your mortgage with mortgage insurance. Finally, with 25 percent down, mortgage insurance premiums come out to be about 0.5 percent of your loan amount.

Mortgage Insurance for First-Time Homeowners

Mortgage insurance allows a greater number of Canadians to become homeowners. For example, lenders likely wouldn’t grant 95 percent financing to those with only five percent down. They definitely wouldn’t be in cases where financing is provided with no money down.

This provides a guarantee to lenders. That guarantee is that in the event the buyer defaults on their payments, their investment is protected. Moreover, it is usually required for those with less than 20 percent down.

Mortgage Insurance for Energy-Efficient Properties

In Canada, the top two companies are the Canada Mortgage and Housing Corporation (CMHC) and Genworth Financial Canada. Both offer major discounts to customers. This includes those who purchase an energy-efficient home, make energy-saving renovations, or try to cut down on energy use. These benefits can include:

  • up to 10 percent of premiums refunded
  • extended amortization period (up to 35 years) without surcharges
  • Genworth’s online discount program for common household items
  • savings from reduced heating costs

New Residents to Canada

Loan protection also makes it possible for new immigrants to Canada. These are people who have no credit or income records in the country. These people need a start somewhere. With this level of protection, they are able to qualify for a loan with as little as five percent down. Genworth offers the New to Canada Mortgage Insurance Program. The features of the program include:

  • Opportunity to purchase a home in a timely manner and become economically established in the country. In other words, you start building equity
  • Financing up to 95 percent of the property value
  • Flexible mortgage options: adjustable, fixed and variable rates
  • Individual review of applicants
  • Available up to three years after arrival to Canada
  • No income minimums necessary to qualify

The CMHC also offers The Newcomer’s Guide to Canadian Housing on renting and owning. This guide is a great source on renting and owning property in Canada. Additionally, it can be a hugely beneficial tool.

It can also be helpful for those new to Canada or trying to get better rates. Most importantly, you will want to plan ahead for family and mortgage protection in the event of your passing. Looking into life or term life can ensure that you are covered.

If you have any questions or need a guiding hand, call Super Brokers today. Our team has the experience necessary to help you get the mortgage insurance that best fits your needs. Don’t go it alone when a professional is just a call away to make things easier.

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