25 Sep

Mortgage Basics – Types of Insurance


Posted by: Tasha Cunningham

In part one of this two-part series, we will look at the types of insurances you will hear about during the mortgage process. Sometimes it is a good idea to revisit the basics when looking at a complex thing like a mortgage. There can be misunderstandings which crop up. The mortgage process can be very stressful as you wait for come anonymous entity to decide whether or not you are able to buy the home of your dreams. It is no wonder that things can get missed. Fear not! We will take a  look at some of the basics so you can avoid things best avoided.

1. Mortgage Default Insurance – Three are three mortgage default insurance providers in Canada. CMHC, Genworth and Canada Guaranty. If you are purchasing a home with less than 20% down you will have to be approved by both the lender and the default insurance provider for the loan. They are looking at your credit, employment stability and the property itself to make their decision. If you default on the mortgage, the bank or mortgage provider is made whole on any shortfall. The cost is a set amount based on how much you are putting down and will be added to your mortgage so you do not have to worry that you need to come up with extra funds for it. As of today based on a standard borrower the premiums are shown in the following table though it is an important note that the premiums are higher in certain cases.

LTV Ratio Premium Rate

Up to 65% = 0.60%

65.01% – 75% = 1.70%

75.01% – 80% = 2.40%

80.01% – 85% = 2.80%

85.01% – 90% = 3.10%

90.01% – 95% = 4.00%

2. Title Insurance – This is required on most mortgages these days. The cost is around $250 and will be collected from you at the lawyer’s office. Title insurance is often used instead of a Real Property Report as it is quicker and less expensive. If for example, the garage on your new home had been constructed offside of where it should be, it is the responsibility of the title insurance to make it right. This could happen by getting the city to allow it or in the worst case, to cover the cost to move the garage.

3. Home Insurance – You have a legal responsibility to make sure you have property insurance. This protects you against things life fire, flood or theft. You will be required to provide verification of the insurance when you meet with the lawyer. You will probably want to do a bit of research before choosing your company. Not all insurance policies are equal and a truly awful time to find that out is after a horrible event.

4. Life Insurance – You will be offered life and disability insurance with your mortgage. Most of us assume that we have sufficient coverage through work but the protection of your family and their home should be given serious consideration. You are not obligated to accept the insurance provided to you but please factor the cost of sufficient coverage into your budget when you are thinking of buying your home. A few things to consider:

  • The younger you are when you get insurance the cheaper it is.
  • If you leave your current employer or get laid off and have developed a health concern it can be problematic to find affordable if any coverage.
  • If you choose the insurance from the mortgage lender or bank you may find yourself tied to them indefinitely if you experience a change in your health. This could mean higher rates at renewal.
  • Disability is the number one reason for foreclosure in Canada which goes to show that it can and does happen to many of us.

Pam Pikkert
Dominion Lending Centres – Accredited Mortgage Professional


28 Aug

How to Renew Your Mortgage in 5 Easy Steps


Posted by: Tasha Cunningham

If you have a mortgage, chances are unless you win a lottery (cha-ching $$$) you’ll be doing a mortgage renewal when your current term has finished.


While most Canadians spend a lot of time, and expend a lot of effort, in shopping for an initial mortgage, the same is generally not the case when looking at mortgage renewals.

So what is a mortgage renewal?

Mortgages are amortized over a set term which can vary from 1-10 years.

About 6 months before the end of your term, your current lender will suddenly become your best friend showering you with attention and trying to entice you with early renewal offers….Please, please, please Mortgage borrower, sign here on the dotted line …’s so easy!! 

You have 3 options

  1. Sign and send back as is (don’t do it, really I mean it…don’t do it!!)
  2. Check the market to make sure you are getting the best rate and renegotiate with your current lender
  3. Talk to a Dominion Lending Centres Mortgage Expert and together we can discuss the best options available for your situation.

Lenders know that 80% of people will sign their renewal forms, because it’s easy. Banks & Lenders are a business and as such they want to make the highest profits to keep their shareholders happy. As an educated consumer, you need to take the time to ensure you are being offered the best possible rate & terms you can get. Remember all those hours of research you did regarding lenders and mortgage rates when you were buying your first home?

Yes, signing the renewal document is easy, however, it’s in YOUR best interest to take a more proactive approach. Money in the lenders pocket comes directly out of your pocket…. so its time to get to work!

5 steps to save you money on your mortgage renewal

  1. Receive the renewal offer from your current mortgage lender and examine immediately, which gives you enough time to make an informed decision.
  2. Do your research via the internet and phone calls to find out about current rates.
  3. Phone your current lender and negotiate!
  4. If your lender will not offer you a better rate then it’s time to move your mortgage. YES, you will have to complete a mortgage application and gather documentation, just like you did for your original mortgage.
  5. Take a look at your budget and see if you can increase the amount of your mortgage payments above the mandatory payments and save money by paying off your mortgage quicker.

Your mortgage is one of your biggest expenses. For this reason, it is imperative to find the best interest rates and mortgage terms you possibly can.

As you can tell there is lots to discuss about mortgage renewals.

Kelly Hudson

Dominion Lending Centres – Accredited Mortgage Professional