What is Mortgage Insurance?

Many customers are confused about exactly what is mortgage insurance. Sometimes it is confusing as to what are the banks really talking about when they bring this up. There are different types of insurance that are required or offered when you purchase a home. These are the types of insurances that you will hear about when purchasing a home or getting a mortgage.

  • Mortgage insurance 
  • House Insurance (property insurance to protect your home from fire etc.)
  • Mortgage life/disability Insurance (insurance that will payout your mortgage if you pass away or may cover part or all of your mortgage payments if you become disabled while paying your mortgage)

Mortgage Insurance

This is an insurance policy that protects the bank if you should default on your mortgage. So basically if you stop paying your mortgage and the bank needs to recall your mortgage CMHC, Genworth, or Canada Guaranty will guarantee the mortgage. This allows you, the home buyer, to purchase a home sooner, because without mortgage insurance you would need 20% down payment minimum to purchase a home. Also many consumers don’t realize there are different products that CMHC, Genworth, and Canada Guaranty offer to help the homebuyer purchase a home in different situations such as:

  • Newcomer to Canada 
  • Self-employed buyer 
  • Purchasing a home for an immediate family member such as a parent or perhaps a child in University
  • Second home/vacation property, and 
  • Purchasing a home requiring renovations
  • Building a home through a builder, contractor, or a self-build
  • Borrowed down payment
  • Energy efficient homes can be eligible for decrease in premium

These different products help you, the homebuyer, become a homeowner in Canada sooner than if you had to wait and save up 20% down payment. In some markets compared to the earnings, 20% down payment would be very difficult to save. You can port the insurance premiums with you to your next home purchase (certain rules apply) and with a mortgage broker/associate we can help you pick the best product for you and also educate you on the different products available to you.

In Canada there are three companies offering this kind of insurance:

The Mortgage Centre

Get Your Pre-Approval Today

Tutorials

There are lots of tools that will help you understand insurance.

They all have almost similar products and also offer unique products for self-employed people. If you still have questions about mortgage insurance, don’t hesitate to call or email us today.

SERVICE AREA: EDMONTON, COLD LAKE, BONNYVILLE, LLOYDMINSTER, CAMROSE, WAINWRIGHT, ST. PAUL, LAC LA BICHE AND THE SURROUNDING AREAS IN ALBERTA

Lakeland Mortgage

#6 4428 50th Ave.

Bonnyville, AB  T9N 1B6

Main: 780-826-3544

Toll Free: 1-866-812-3544

Fax: 1-866-285-4221

Email: shannon@lakelandmortgage.ca

Hours

Monday – Friday:
9:00AM – 5:00PM
Tuesday & Thursday:
Evening appointments available

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