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Follow on Google News | Why Do Borrowers Need Mortgage Home InsuranceBorrowers who want to buy a house or another property with less than 20 percent of the asking price need mortgage loan insurance. In accordance with the Canadian Banking Act, banks are not allowed to offer mortgages where the loan amount
By: Your Loan On the other hand, applicants for a mortgage loan (http://www.yourloan.ca/ The property you seek to buy should be in Canada. Another requirement relates to your total housing expenses per month, including interest, principal amount, heating, property taxes, 50 percent of your condominium fees, if applicable, and annual site lease, if applicable. The latter should not be more than 32 percent of the gross income of your household. Another requirement is that you total debt should be less than forty percent of your income. Borrowers can find a wide variety of products through their lender. They may have to buy mortgage home insurance if they are refinancing to move to another house or want to make renovations. You may want to check with a mortgage broker or bank on the requirements for getting a flexible mortgage insurance cover. Borrowers may want to inquire about pre-approved mortgage loan insurance options, and this is is helpful in finding out what amount of money they will qualify for. The down payment is just 5 percent with mortgage loan insurance (http://www.yourloan.ca/ If you need mortgage loan insurance, your lender will arrange one for you with the Canada Mortgage and Housing Corporation. When you negotiate the terms of your mortgage loan, make sure that the latter is CMHC-insured. Even if you would rather not have mortgage loan insurance, there are two benefits to it. Saving on interest is one and building equity sooner is another benefit. Finally, why do financial institutions require that you have mortgage loan insurance? This eliminates the risk financial establishments take, making it possible to offer mortgage loans at lower rates. In addition, they can take smaller down payments than what they normally require. The mortgage loan insurance serves as a safety net to mortgage providers and the financial system. It makes it possible for banks to offer mortgages during periods of recession and economic downturns. # # # Loans Canada is dedicated to all types of loans available to Canadian residents and Canadian businesses. http://www.yourloan.ca End
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