Understanding mortgage insurance

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When it comes to home loans, there's plenty of talk about mortgage rates, but far less about mortgage insurance. While not as exciting as fluctuating interest points, mortgage insurance is still a vital part of the homebuying process for most Canadians. It's with this in mind that prospective homeowners should do all they can to understand what mortgage insurance is and how it works.

What is mortgage insurance?
Typically, if a homebuyer takes out a mortgage loan with less than a 20 percent down payment, mortgage insurance is required. This insurance protects lenders in case a borrower is incapable of making mortgage payments and defaults on a loan. It's important to remember that this coverage is only for lenders, not homeowners. In most cases, if a homebuyer is able to pay a minimum of 20 percent on a down payment, mortgage insurance is not required. Continue reading

Dealing with home emergencies

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After dealing with mortgage rates and home loans, the last thing you want to do is add more stress to the home owning experience. However, it’s essential that homeowners understand how to keep their family and property safe in case of an emergency.

While less dangerous than other emergencies, power outages can still wreak havoc when it comes to your health, security and comfort. Besides the obvious inconvenience of your home’s appliances failing to work, power outages leave you vulnerable to things such as fire or carbon monoxide poisoning if your detection devices lose power. In addition, losing power could mean losing heat, something that could lead to serious damage and discomfort in the middle of winter.

One way to deal with power outages is to make sure that you have a backup system in place. Purchasing a generator will allow your home to continue functioning in case of a power outage, although you will likely need to ration power to the most important parts of your home. You can help cut down on wasting back up power by installing energy efficient appliances. Not only will these help in the case of using a back up generator, but they will save you money on energy costs as well. Continue reading

Is your home insured for natural disasters?

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With Hurricane Sandy ripping her way through homes and neighborhoods in the U.S. and Canada, leaving thousands of people homeless and even more without power, it's a little late to worry about whether your home is insured for natural disasters.

But hurricane season and tropical storms aren't the only concern for Canadians, and tornados, earthquakes and flooding (usually not insured under standard policies, but there may be exceptions) may also do severe damage to a home – does your insurance cover all possibilities?

All insurance policies are different and vary on the home's location, policy amount and company, so the first step in double checking insurance coverage is to take a look at the policy or contact your insurer to ask a few questions. If you do have natural disaster coverage, do you know how much the deductible is? Is it a deductible separate from your homeowner's policy? Continue reading

Mortgage restrictions cool down market, leave buyers in a pickle

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Much like the rising and setting of the sun, some things in life are just givens – death, taxes, bad reality TV shows.

Well, now you can add insurance to the list.

Just as most Canadians must shell out money for insurance to drive a car, the majority of Canadians must spring for insurance to buy a home. For homebuyers with less than 20 percent equity, paying for mortgage insurance is mandatory.

According to the Canadian Real Estate Association (CREA), the average home price in Canada is $350,192. That means that putting down 20 percent would run the average citizen $70,038 – a hefty chunk of change that most buyers can’t afford out of pocket.

Fewer than four in 10 buyers can afford a 20 percent down payment, according to the Canadian Association of Accredited Mortgage Professionals. Continue reading

Serious weather damages increase importance of sufficient condo insurance

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Here's a (non-trick) question for you: If something goes terribly wrong in your condo – think busted pipe, kitchen fire … you know, the really bad stuff – that originated in your unit and affects other units or the entire building, who pays the insurance deductible? And should that insurance deductible be enough to pay the insurance deductible for the entire condo?

According to the Insurance Bureau of Canada, condominium homeowners may be in for a pretty big shock if a problem in their condo causes damage in other parts of the building. When homeowners discover their condo council's insurance policy mandates they pay the entire deductible to the tune of $100,000 or so, it can ruin their credit and quickly put them in the poorhouse in more ways than one. More often than not, owners discover this little tidbit when it's too late and the damage has been done.

Back in the day, most condo council bylaws stated that all condo owners in a building were responsible for paying the deductible on common assets. The only exception was when the problem and damages were caused by an owner's negligence. Although condo owners will still be fully responsible for the association's deductible if their negligence causes damage to other units, the same may be the case even if they are not negligent. In other words, condo owners may be faced with full responsibility whether the problem could have been prevented on their part or otherwise. Continue reading

Don’t get burned when planning home renovations

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So, you were able to secure a mortgage and buy your dream house. OK, so maybe it isn't your dream house as it currently stands, but it has tons of potential, right? All it takes are a few tweaks and renovations and voila! It will be the perfect property and exactly what you've always wanted.

The first step is to secure a contractor for the job or jobs, depending on how large a project you're taking on. Whether you know a friend of a friend who is talented – or so you've heard – and will accept cash under the table or you go the route of hiring a true-blue professional, remembering one key factor: Always get everything in writing. All the time. No exceptions.

Still thinking about that cash-under-the-table contractor? You know, the one who promised you the moon, stars and a granite countertop at a quarter of the price? Before shaking hands and sealing the deal, it's wise to make sure this person is aware of laws and rules surrounding home renovations. OK, so if it's a bathroom tiling project, it's probably fine, but what if you're looking for someone to help you build a deck or add a room onto the house? Continue reading

What can happen to your mortgage if tragedy strikes

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Nobody wants to think about tragedy striking an otherwise charmed life, especially if it entails a family member getting sick, injured or even passing away. Life's unforeseen circumstances add an element of risk to just about everything, but they're not reason enough to avoid getting a mortgage. In fact, changes in any family dynamic – adding someone, losing a member and anything else you can think of – have the potential to throw a wrench in mortgage plans. The most serious, however, is dealing with a mortgage when tragedy strikes.

Is it scary to think about? Sure. Is it sad to even consider? Of course. Here are ways Canadians can prepare their mortgages and finances in the case that tragedy strikes:

When something happens to the breadwinner
It's archaic to say that most Canadian households are indeed provided for primarily from one person's income – the breadwinner. Having financial security like life insurance, medical coverage and emergency savings accounts can certainly help ease the pain and distress a family may feel if medical problems or death affect a mortgage-holding household, but such protection is not always in place when it's needed. Continue reading

Don’t forget about life insurance coverage when saving for your dream home

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Young, first-time homebuyers who are saving up for their dream home and brushing up on mortgage terminology may be easily sidetracked by the latest and greatest home projects Pinterest has to offer. Sure, images of lush, budget-friendly gardens and $50 room renovation before-and-after pictures can be lovely to gawk at, but there are more important matters at hand.

Like actually securing a mortgage. And creating a budget. Then getting sufficient life insurance.

"But I'm young and healthy with plenty of home renovations in my future! Why do I need life insurance right now?" first-time buyers may ask.

Actually, the reason is quite simple. Life insurance can offer a cushion of protection for people who aren't lucky enough to die of natural causes at a very old age, according to the Winnipeg Free Press. Regardless of medical advances and disease prevention tips experts constantly promote, the unfortunate fact is that not everyone has their finances in order when they die – ripe old age or otherwise. Continue reading

Healthcare options for Canadian immigrants

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Canadian immigrants who want to take advantage of the nation's healthcare offerings have numerous options to choose from.

Citizens and permanent residents of Canada are eligible for health insurance. Those who have the proper amount of coverage will not have to pay directly for most healthcare services, which are instead paid through their taxes. All that is required is a health insurance card that is presented at the medical clinic or hospital.

Migrant workers can also benefit from the nation's healthcare offerings. It is the responsibility of the farm owner to enroll his or her migrant workers in the provincial health plan.

Canadian immigrants can be a source of inspiration for citizens and permanent residents alike. RBC Royal Bank recently announced plans to team up with Canadian Immigrant magazine to begin voting for the fourth annual Top 25 Canadian Immigrant awards. Continue reading

Genworth looking to profit from CMHC limit

Genworth MI Canada, the nation's second largest mortgage insurer, recently announced plans to take advantage of government constraints on the Canada Mortgage and Housing Corporation, its Crown corporation rival.

According to The Globe and Mail, executives at the mortgage insurer have made it clear they view the situation as a new business opportunity, as Ottawa mulls loosening restrictions on the CMHC.

“Given economic conditions and concerns around personal leverage/housing in Canada, we would be surprised to see the government increase CMHC’s limit in the near term,” Jason Bilodeau, analyst at TD Securities, recently wrote in a note to clients. Continue reading