Buying a home in Canada with a mortgage, especially after renting, can be confusing. One item of a mortgage that borrowers often have questions on is mortgage insurance. Mortgage default insurance is also known as CMHC insurance. This is a mandatory insurance that home buyers must pay if they are making a down payment of less than 20%. Knowing about CMHC insurance and what you can do to minimize your CMHC insurance premium can help you save money when the time comes to buy a home. Here's what you need to know.
For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.
How Does Mortgage Default Insurance Work?
Mortgage default insurance is a type of insurance that minimizes risk for mortgage lenders. Mortgage default insurance pays for the balance on the mortgage if the borrower defaults on their loan. It is this insurance that enables lenders to make loans to higher-risk buyers who are unable to pay the 20% down payment.
How Can You Calculate Mortgage Default Insurance?
Mortgage default insurance is calculated as a percentage of the mortgage, depending on how big the down payment is. It is then added to the total mortgage balance. The table below...
No matter when a seller decides to sell their home, they're subject to market forces that are more or less outside their control. Selling a home in a buyer's market can feel like poor timing, but there are ways to maximize the offers when sellers understand the buyer's mentality. Here are a few tips for everyone to make the most of the situation, so they don't have to wonder what might have been.
For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.
Do the Research
Understanding the market is the first step to selling in a buyer's market. It can help the seller set realistic expectations before they even list the home. Homes on a buyer's market may take longer to close, but once a seller understands the dynamics, they can mentally prepare for the next several months.
No matter what the economic climate is like though, sellers should start identifying ways to make a strong first impression on buyers. They don't necessarily have to hire a designer to stage their home, but they may want to repaint the siding or start planting a few bulbs in their garden. Buyers notice the finer details on a property,...
When a potential homebuyer decides to stop renting and begins searching for a new home to buy, they may find that some homes may have additions or improvements that have been made in the past. Most of these improvements will need a building permit. Building permits enable local authorities to oversee home improvements and ensure that those home improvements are performed to code. When a permit is pulled, this initiates a process that can't be completed until a building inspector has signed off on the work being done in the home. If the permit is not pulled, the work proceeds unmonitored. Often, unpermitted work is not performed to code.
Why You Should Remediate Unpermitted Work
Unpermitted work can be dangerous. Permits enable local building inspectors to ensure quality of work, follow the building codes, regulations and standards. They also may require contractors to make repairs if the work done on a home is not correct. Living in a home with unpermitted work could result in problems like fires, leaks, mold and structural damage. Remediating unpermitted work prevents poor workmanship from damaging the home.
To get the work permitted on an old home improvement or addition, the contractor will likely need to open the walls or tear out some work that was previously...