​Mortgage Insurance In Sherwood Park

Mortgage Insurance in Edmonton: What You Need to Know

Buying a home is a significant milestone, and for many, it's the most substantial investment they will ever make. In Edmonton, where the housing market continues to grow, securing your investment with mortgage insurance is crucial. This insurance plays a vital role in protecting both lenders and home buyers, ensuring that the dream of homeownership remains attainable and sustainable.

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What is Mortgage Insurance?

Mortgage insurance is a type of insurance policy designed to protect lenders in case the borrower defaults on their mortgage loan. It essentially mitigates the risk for lenders, making them more willing to offer loans to a broader range of borrowers, including those who may not have a substantial down payment.

Mortgage insurance is particularly important because it provides a safety net for lenders. If a borrower fails to make their mortgage payments, the insurance covers the lender's losses, allowing them to continue offering loans to other potential home buyers.

Why Do You Need Mortgage Insurance in Edmonton? 

When you purchased a home in Edmonton, mortgage insurance becomes an essential part of the process, especially if you are unable to provide a significant down payment. In Canada, if your down payment is less than 20% of the home’s purchase price, you are required to have mortgage insurance.

Insured mortgages help you qualify for a mortgage by reducing the lender's risk. This means that even with a smaller down payment, you can still secure a loan to purchase your dream home. Without mortgage insurance, many potential home buyers might find it challenging to obtain financing, particularly in a growing market like Edmonton.

How Mortgage Insurance Works

When it comes to securing your family's future, choosing the right partner is paramount. Black Edge Advisory stands out as your trusted ally in this journey, offering a range of advantages that set us apart.

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Adding Mortgage Insurance to Your Mortgage

Mortgage insurance is typically included in your mortgage and is paid alongside your regular mortgage payments. When you take out a mortgage with less than a 20% down payment, the insurance premium is either added to your mortgage amount or can be paid as a lump sum upfront. This insurance premium is calculated as a percentage of the loan amount.

​Mortgage Insurance In Edmonton

Breakdown of Mortgage Payments with Insurance Included

When mortgage insurance is added to your mortgage, your monthly payment will include both the loan repayment and the insurance premium. For example, if your mortgage amount is $300,000 and the mortgage insurance premium is 4%, your total loan amount becomes $312,000. This increased amount is then divided over your loan term to determine your monthly payments.

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Impact on Monthly Payment and Overall Mortgage Amount

Including mortgage insurance in your mortgage increases your overall loan amount, which in turn affects your monthly payments. While this means slightly higher monthly payments, it also means you can secure a mortgage with a smaller down payment, making home ownership more accessible.