4 Types of Insurance Related to your home
MORTGAGE DEFAULT INSURANCE is an added premium into your home mortgage. Mortgage default insurance is required for those with a High-Ratio mortgage (less than 20% down) or borrowers with higher risk. This policy is in place to protect lenders from risk of borrower default.
The 3 mortgage default insurers in Canada are CMHC, Genworth & Canada Guaranty.
You purchased a big investment and you are going to want to insure the building & contents with FIRE & HOME INSURANCE. Fire insurance policies pay out the mortgage lender if the house burns down.
Mortgages won’t fund unless lender sees proof of fire insurance.
Fire & home insurance is extremely important and it is best to speak to a Home Insurance broker that does a thorough job to ensure everything is covered in case of fire, theft or water/sewer backup.
Now the morbid one that most avoid talking about…
Who pays the mortgage balance or monthly payments if a homeowner dies, is injured or disabled?
LIFE & DISABILITY INSURANCE has you covered in these cases. There are many forms of life & disability insurance and it is strongly recommended to speak to a licensed Life Insurance Broker and not just sign what is given on loans. These policies can be complex and best to speak to a professional so you aren’t wasting your monthly premium.
And at last TITLE INSURANCE….Signing papers at the lawyers you may notice a premium of Lender title insurance. What is that?
It is a one time premium, generally $150-300, to insure your mortgage and cover any risks to title.
The different types of insurance can confuse first time homebuyers. Have questions about types of insurance for mortgages, feel free to contact Jacqueline Jeffries at 780.220.5968 or firstname.lastname@example.org.