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Canadian Home Mortgage Refinancing Loan Insurance
If you are planning on buying a new home but are afraid that you cannot make the financial requirements, do not fret, there are ways in which you can still get a home mortgage refinancing loan. An excellent site for Canadian buyers is the Canadian Mortgage and Housing Corporation site. They will offer you a comprehensive understanding of the procedure for procuring your first home.
A very big concern for banks and other lenders who are approached by prospective buyers, whom cannot make the 20% down payment requirement for a home is that they do not default in payment. Also is the concern that somewhere down the line these clients will get behind in payments. Both scenarios do not make for good business decisions for the lending institutions. Bank and other lending institutions are in the business of making money not losing it. They need some kind of assurance that the new homeowner will be able to meet their obligations. The way to do that is through a home mortgage refinancing loan.
A homeowner can take out a home mortgage insurance that will guarantee the down payment on the house. The cost of the insurance premiums will vary according to the amount of down payment needed to cover the home. It could be anywhere from .65 to 2.75 percent of that down payment. A mortgage home insurance is not the same as a mortgage life insurance, which protects the descendents of a deceased homeowner from having this debt upon their shoulders.
Canadian prospective homeowners cannot get around the home mortgage refinancing loan even if they decide to shop around from bank to bank and lending institution to lending institution. In actual fact, the Canadian government has legislated that banks must require home mortgage insurance for the said property when the buyer has less than 20% down payment or the home mortgage loan will be for more than 80% of the value of the home. The Canadian Mortgage and Housing Corporation will finance up to 100% of the value of your home through their mortgage insurance.
There are some additional requirements for your mortgage insurance protection.
• You must purchase a house in Canada.
• You must be able to meet a 5% down payment on a single unit dwelling or
• 10% down payment on a 3 or 4 unit dwelling
• The Down payment must be made by the prospect homeowner but down payment gifts from relatives are acceptable on a three-four unit complex
• If you are missing the minimum down payment there is still a possibly of getting buyer incentives or other types of borrowed funds. Inquire about the about these possibilities through your bank or financial institution.
• A CMHC Flex 100 insurance plan will help borrowers who do not have the required down payment yet have a good credit rating and the proven ability to meet their financial obligations.
• You are able to keep your total monthly obligations for housing: including Principal, Interest, property Taxes, Heating etc below 32 percent of your gross salary and total debt is not more than 40% of your gross income.
Consult with your Lending Institution to find out any other requirements where applicable.
Of course anyone can see that insurance is wonderful way to safeguard your home from being taken from under you, and a home mortgage refinancing loan is an excellent way to safeguard your future. You may also consider using a home mortgage refinancing loan for other options such as home renovation and more.
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