Homebuying Step by Step: Your Guide to Buying a Home in Canada
Mortgage loan insurance If you have less than 20% saved for a down payment, you’ll probably have to get mortgage loan insurance. It protects banks and other lenders against the risk of mortgage default, just like property insurance protects you in case of loss. CMHC is a provider of mortgage loan insurance. Insurance premiums on mortgage loans are calculated as a percentage of your total loan amount. They’re based on factors including the size and source of your down payment. In general, the smaller the down payment is, the higher the insurance premiums will be. You can usually pay your mortgage loan insurance premiums up front or have them added to your mortgage loan. You may have to pay tax on the total amount of the premiums if your province charges sales tax.
Learn more at cmhc.ca/mortgageloaninsurance .
Tips for planning and managing your mortgage When financing a home, make sure you’re prepared to deal with any challenges that come up. These can include a loss of income, increased expenses or rising interest rates. The following tips can ensure you’re financially stable through any ups and downs. Choose a smaller mortgage. Get a smaller mortgage than the maximum amount you can afford. This will keep your monthly housing costs lower and allow you to deal with sudden changes in your income or expenses. Evaluate the impact of higher interest rates on monthly payments. With a variable rate mortgage, even a small increase in interest rates could have a big impact on your monthly costs. Taking time now to learn how changing rates could affect you may help you You can pay down your mortgage faster by making your payments weekly or every two weeks. You can also increase the amount of your regular payment or make additional lump sum payments if your mortgage allows it. Be proactive and ask for help if you need it. If unexpected challenges affect your ability to make mortgage payments, contact your lender or broker as soon as possible. They can work with you to find a solution to any temporary financial setbacks. avoid financial problems in the future. Plan to be mortgage free sooner.
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