Hi,
I am looking into buying a house for around $350K to $400K
If I pay a down payment for more than 20%, how much insurance do we need to buy to coverage that remaining mortgage
i.e how much do % of the mortgage do banks insist that one should get mortgage insurance
Biren,
Banks cannot force you to take mortgage insurance. I do not think this is a legal requirement. However, they will try very hard to sell you the mortgage insurance. Rule of thumb: Do not buy mortgage insurance from bank.
Mortgage insurance is for you and your family's protection. It is nothing but life insurance. Basically, mortgage amount is added to your net worth.
Considering you bought a house for 400K with 80k (20 %) down payment, you liability will be 320 K. That's the minimum insurance you should take.
Let me emphasize that this is not your actual net worth. It could be lower or higher (most of the cases) based on your need analysis. This can be done with any financial advisor.
Biren ! Contact VJ on this board ..He will give you a very good solution that will cover your insurance and the premiums will be returned back with growth at maturity .
Good luck
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Growing Old Is Mandatory ..Growing UP is Optional
Quote:
Originally posted by AshwaniG
Biren ! Contact VJ on this board ..He will give you a very good solution that will cover your insurance and the premiums will be returned back with growth at maturity .
Good luck
Let me ask you a question. Do you know what kind of insurance is recommended for mortgage? Is it term, UL or Whole life?
It is term insurance. Now tell me which term insurance will give you growth along with return of premiums at maturity!
BTW, insurance should not be used for growth purpose. Period
Use TFSA for that.
Protection, not the profitability, is what you are looking from insurance product.
Hi rsbagwell !
I am not a insurance broker nor a personal friend of VJ . I bought my policy from a different broker around two years back . Since VJ was actively posting on life insurance here , I invited him to review my policy and offer a better solution .
After spending two hours of his time , he explained me all policy details which my original broker didn't . Conclusively he advised me to keep the same policy . He didn't tried to me to sell his product . That is what I admired and found him honest professionally . I am sure that VJ or someone else in field can give precise answer to your query as I have minimum understanding of financial related matters .
Thanx
AG
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Growing Old Is Mandatory ..Growing UP is Optional
Thanks for the response.
OP asked a simple question that was answered in a simplest possible way.
I just felt your response was not in line with what OP asked for.
Not sure but do apologize if my response inadvertently hurt your feelings.
BTW, you did not owe that big of an explanation.
Location: Brampton, Ont, Canada
Posted on: 06-04-10 14:18:02
Quote:
Originally posted by birentoronto
Hi,
I am looking into buying a house for around $350K to $400K
If I pay a down payment for more than 20%, how much insurance do we need to buy to coverage that remaining mortgage
i.e how much do % of the mortgage do banks insist that one should get mortgage insurance
Buying a house there is two type of insurance: CMHC (mortgage loan insurance- protect banks) & House Insurance (property insurance –protect you)
The Canada Mortgage Housing Corporation (CMHC) provides mortgage loan insurance to lenders for home buyers with a down payment of less than 20%,If you are putting 20% down payment then you dont need to pay any thing insurance ( Mortgage Loan Insurance). - CHMC Rules
House insurance
If you own your own house, then you'll want to protect not only your physical building, but all the things in your house too. A standard house insurance policy will ensure that if something like fire, vandalism or theft occurs, then you will be properly looked after and your valuables will be replaced.
You also need to think about protecting any other structures that exist on your property, like a detached garage. As well, in the event that your house is damaged, and you need to move out for a while, you may want to consider investing in insurance that will help pay for out-of-pocket expenses like hotel rooms and food.
As a homeowner, it is possible you may be held liable for accidents that people have while on your property. What's more, you may accidentally damage other people's belongings either in your own house, or somewhere else. A well-structured house insurance plan will make sure that you're covered for any of these unforeseeable events
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