Mortgage Insurance
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Your first move must be to look into your mortgage options! You can acquire a much lower interest rate if you consider refinancing your mortgage. Keep in mind that it is also very risky as it may incur a huge prepayment penalty, so make sure you do some research beforehand.
Why Mortgage Protection Insurance?
Before you sign off on your mortgage, there is one more type of insurance your mortgage broker should tell you about – Mortgage Protection Insurance. Despite being optional, it should still be considered. Almost every mortgage broker in the business has a story of someone who passed on the extra coverage and tragedy hit.
Unfortunately, life happens but it doesn’t have to happen to your home. While you may not want to spend the money now, or maybe you already have some type of life insurance policy through work, don’t discount this option as it is often a blessing in disguise – especially when it comes to homeowners with a spouse and children. Can they carry on with the mortgage payment? If not, they would be forced to sell on top of everything else. For a few extra dollars a month, mortgage protection insurance provides that safety net in the event it is ever needed.
When it comes to choosing a mortgage protection plan, there are a number of different policies available depending on your budget. Manulife’s Mortgage Protection Plan offers immediate insurance and can be canceled at any given time. If you think you may be covered through your work, it can’t hurt to take a closer look at the policy.
Mortgage insurance is what we consider “debt replacement” and life insurance is more fitting as an “income replacement”. This is an important distinction and you should understand the difference. You also need to see just how much you’re going to get through your life insurance policy; you may be surprised just how little it amounts to.
Property + fire insurance
Lastly, after you’ve signed off on your mortgage you need to close on the home. Before you do this, your lender is going to require home insurance. When it comes to home insurance, there are many different types of coverage however it generally protects you from damage to the home that is accidental or unexpected, such as a fire.
Home insurance can also cover the contents of your home, depending on your insurance package. For individuals looking at purchasing condos or townhouses, this is especially important! The insurance from strata typically protects the building itself and common areas, as well as your suit “as is”, but it will not account for your personal belongings or any upgrades you made. Be sure to cross-check your strata insurance policy and take out an individual one on your unit to cover the difference.
One final thing to consider with regards to home insurance is that, just because you have home insurance you’re not necessarily covered in the event of a flood or earthquake. Depending on where you live, you may need to purchase additional coverage to be protected from a natural disaster. It’s best to talk to your insurance provider to confirm that you are covered.
At the end of the day, purchasing a home is a huge investment. Why risk it when there are so many great insurance products to ensure your investment – and family – remain protected? Reach out to a Dominion Lending Centres Mortgage Professional today to find out what coverage is needed and how to go about getting it!
Home Insurance.
Home equity loans are particularly one of the best tools in debt consolidating as it usually comes with long repayment timelines and low-interest rates. Home equity is the difference between the remaining mortgage balance and the value of your home. This kind of mortgage uses your home to secure a loan. In one more case, it means that you are using your home as collateral to secure your current and existing debt.
Porting a mortgage to a more expensive home.
If you want to purchase a more expensive home and borrow more money, porting a mortgage can be complicated and pricey. You will require to pass your lender’s affordability inspections and you may have to settle a fee to increase your loan or get on another mortgage product at a different rate.
You will typically have to pay a valuation fee so your lender can verify that the new estate is worth approximately what you intend to pay for it. It is best to look at the interest rates currently available for your situation to see whether you are looking into the best deal you can have.
Transferring a mortgage to a more expensive property than your current one will include a valuation and then an assessment of your existing financial position by your lender to ascertain whether they think you can afford the subsequent increase in your regular repayments.
