Mortgage Insurance 101
June 16, 2020 | Posted by: Mike Garganis
There has been a lot of talk about mortgage insurance lately.... but for those not sure what mortgage insurance is, here is a quick video from Genworth Canada that explains the basics.
A conventional mortgage in Canada normally requires a down payment of at least 20% of the purchase price. When homebuyers have less than 20% for a down payment, Mortgage Insurance allows them to secure a mortgage for their home purchase.
Tailored Mortgage Insurance products from Genworth Canada can help you achieve the dream of homeownership sooner and with as little as 5% down.
Saving for a down payment is always a great idea, trouble is, depending on the area, prices may be rising faster than the savings are building up and, as values rise the dream home gets further out of reach.
This is where mortgage default insurance more commonly referred to as “mortgage insurance” can help. By enabling qualified borrowers to purchase a home with as little as a five per cent down payment.
If the right home for you has a purchase price of $300K then lenders will normally require you to provide a down payment of at least $60K. With Mortgage Insurance, you can secure a mortgage with as little as $15K down.
Mortgage insurance is a win-win situation for homebuyers and lenders. Lenders rely on it to protect themselves from financial losses in case a loan is not repaid. Because lenders have this protection they are able to offer loans with smaller down payments provided credit and legal requirements are met.
For home buyers, this means access to homeownership sooner at a competitive rate and with a lower down payment.
Know your options and ask your mortgage professional how Genworth Canada can help you realize the dream of homeownership sooner.
Have questions? Contact me today!