March 2014

There are 1 blog entries for March 2014.

 

Canada Mortgage and Housing Corp. is raising its rates by an average 15% on May 1.

Although this is not good news for homebuyers since it will add to the cost of many purchases, the overall impact isn’t disastrous.

If you have less than 20% for a down payment, you must obtain mortgage insurance, either through CMHC or a private insurer such as Genworth Canada or Central Guaranty. The cost is typically added to your mortgage and paid over the 25 year amortized term.

The reason for mortgage insurance is that banks would likely not lend money to people who, for example, only have 5% for a down payment, unless the mortgage is insured. CMHC essentially guarantees the loan to the bank so that if the borrower defaults and the property is sold at a loss, CMHC

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