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Sarah Colucci's Mortgage Blog

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Mortgage News 2022

What Is Mortgage Insurance?

5/29/2021

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Mortgage Default Insurance 

Mortgage Insurance (mortgage default insurance) is a type of insurance that protects mortgage lenders from mortgage default. Mortgage default occurs when a borrower can no longer make mortgage payments (stops making payments) and cannot meet their obligations under their mortgage contract.

In Canada, the three high-risk mortgage insurers that offer mortgage insurance are Canada Mortgage and Housing Corporation (CMHC), Genworth (now Sagen) and Canada Guaranty. 

Borrowers that buy a home will have to pay mortgage insurance if they have less than a 20 percent down payment. The insurance premium, which is a percentage of the loan amount, gets added to the principal mortgage balance and is amortized out to 25 years (or whatever the amortization of the mortgage is). You can learn more about insurance costs by visiting https://www.cmhc-schl.gc.ca/en/consumers/home-buying/calculators/mortgage-calculator. 

In order to qualify for mortgage default insurance, you will require a good to excellent credit score, be purchasing a house with a sale price of no more than $1 Million and qualify with the mortgage stress test’s qualifying rate of 5.25% (as of June 1, 2021). 

If you increase your down payment, you can avoid paying mortgage insurance. 

What is mortgage life insurance?

Borrowers often get confused about the differences between high-risk mortgage insurance and mortgage life insurance. 

Mortgage life insurance is an insurance that protects borrowers or their beneficiaries from the financial risks associated with their outstanding mortgage debt should they pass away. Mortgage life insurance will pay off the outstanding mortgage balance should the borrower pass on. 

What is Mortgage Title Insurance?

Title insurance protects homeowners and lenders against issues relating to the title of the property. It also protects any beneficiaries against potential losses that can occur at the time the property is sold.
 

Title insurance gets handled by a real estate lawyer or a title insurance company. In a nutshell, title insurance helps ensure a smooth real estate transaction because it ultimately protects lenders and homeowners against any losses that could occur because of title fraud or title defects.

Do you have questions about mortgage insurance? Please call or write.


Sarah A. Colucci, Mortgage Agent Lic.  M14000929

Mortgage Edge, Broker 10680
Direct: (647) 773-4849
Email: sarah.colucci@mortgageedge.ca 

 

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What is a rental offset, and why is it important when purchasing investment properties?

5/10/2021

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Rental offset is the percentage of rental income a lender will use to qualify you for a mortgage. Usually, this amount gets deducted from the borrower’s liabilities to help reduce the total debt service ratio.

Working with a mortgage broker ensures you maximize your chances of being approved by using a favourable rental offset rule whether you are buying your primary home and own other rental properties or building your investment portfolio. 

While some lenders only use a 50% rental offset, others will use up to 100% of the rental income you receive to help you obtain adequate mortgage financing. 


If you are purchasing a second home or a property with up to two units, for example, CMHC currently allows up to 100% of the rental income, if eligible, to get added to gross annual income. It also allows the exclusion of property taxes and heat. 

Using favourable rental offsets is critical in qualifying for a mortgage and getting the best interest rate. 

For more information, please call or write. 

You can also visit CMHC  Rental Offsets.

Sarah A. Colucci
Mortgage Agent, Lic. M140000929
Mortgage Edge, Broker 10680 
Direct: (647) 773-4849
Email: sarah.colucci@mortgageedge.ca

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    Senior Mortgage Agent, Lic. M14000929

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Address

411 Queen St. 
Newmarket, ON
​L3Y 2G9

Sarah A. Colucci, Mortgage Agent Lic. M14000929
Sherwood Mortgage Group
Licence # 12176

Telephone

Direct: 647-773-4849
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Email: scolucci@sherwoodmortgagegroup.com
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  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?