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Understanding Mortgage Insurance: What You Need to Know

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Mortgage Insurance in Windsor, Ontario, Canada

When buying a home, mortgage insurance is a topic that often causes confusion. Many homebuyers wonder if they need it, how it works, and what impact it has on their mortgage. At Best Home Mortgage, we believe in simplifying complex financial topics so you can make informed decisions. If you’re considering a home purchase in Windsor, Essex County, or anywhere in Southern Ontario, this guide will help you understand mortgage insurance and its importance.

What is Mortgage Insurance?

Mortgage insurance is a financial product designed to protect lenders in case the borrower defaults on their loan. It is typically required for homebuyers who make a down payment of less than 20%. While it adds an extra cost to your mortgage, it also allows you to purchase a home with a lower down payment, making homeownership more accessible.

Types of Mortgage Insurance in Canada

In Canada, there are two primary types of mortgage insurance:

How Does CMHC Mortgage Loan Insurance Work?

CMHC mortgage insurance enables buyers to secure a mortgage with as little as 5% down. The cost of this insurance is a percentage of the loan amount and is added to your mortgage. The premium depends on the loan-to-value ratio:

These premiums are typically rolled into your mortgage and paid over time.

Benefits of Mortgage Insurance

Do You Need Mortgage Insurance?

If you’re putting down less than 20% on your home purchase, mortgage loan insurance is mandatory in Canada. However, if your down payment is 20% or more, you won’t need CMHC insurance, but you may still consider optional mortgage protection insurance for added security.

Get Expert Mortgage Advice Today

Understanding mortgage insurance can be complex, but you don’t have to navigate it alone. Whether you’re a first-time homebuyer or looking to refinance, Sonia Leo at Best Home Mortgage is here to help. With years of experience in Windsor, Essex County, and Southern Ontario, Sonia can guide you through your mortgage options and ensure you make the best decision for your future.

Call Sonia Leo today for expert mortgage advice and personalized solutions!

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Is mortgage insurance mandatory in Canada?

Yes, if your down payment is less than 20%, you are required to have CMHC mortgage insurance or insurance from other providers like Sagen or Canada Guaranty.

How much does mortgage insurance cost?

The cost depends on your loan-to-value ratio. The premium typically ranges from 2.80% to 4.00% of the mortgage amount and is added to your loan.

Does mortgage insurance protect me or the lender?

Mortgage loan insurance primarily protects the lender in case you default. However, optional mortgage protection insurance can provide financial security for homeowners.

Can I avoid mortgage insurance?

Yes, by making a down payment of 20% or more, you can avoid mandatory mortgage loan insurance.

Can mortgage insurance be refunded or transferred?

CMHC does not offer refunds, but in some cases, a portion of the premium may be ported if you switch homes and meet certain conditions.

To unlock your dream home in Windsor, Essex County, or Chatham-Kent, contact Sonia Leo today at [519-948-1717]. Sonia will work with you to understand your unique financial situation and help you secure the best possible mortgage solution for your needs.

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#1410-5140 Yonge Street,
North York, ON M2N 6L7

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