As of January 1st, 2018 – new mortgage rules are making it more difficult to get a low rate mortgage. This forces the industry to look for new ways to assist our clients towards finding the best rates. Pre-existing mortgage insurance is one of the effective tools to achieve this.
What Is Mortgage Insurance?
What comes to mind when the term ‘Mortgage Insurance’ is spoken. To most it is thought as what is paid out in the untimely death of a spouse in a benefit. This is not what I am addressing today. The mortgage insurance that we are concerned about is the policy you took out with your original mortgage with the bank on closing of your property. This policy protects the lender in case you default on the mortgage. The unintended benefit is that because the risk of the mortgage has been removed from the bank to the insurer – that you receive better interest rates on renewal than a mortgage holder without this insurance.
How Do I Know If I Have This Insurance?
Typically you would have heard about CMHC or Genworth during the initial paperwork process with the bank. If not then as part of your friendly neighborhood Mortgage Broker, I can use your name and address to find out this information. Being previously insured is very important and not something most Canadians know off hand. Once we have determined who your insurer is and your reference number, we can look into how we can leverage this information towards a better interest rate.
Ontario Mortgage Transfer/Switch Program
There is a very important date to remember when it comes to previously insured mortgages. October 16th, 2016. If your mortgage was insured prior to this date then we can transfer your existing insurance policy to your new mortgage and access best rates despite potential changes in your ability to qualify. This also is very important as we will not have to use the new stress test rules that were put in force as of the new year. The results of this cannot be overstated. Once you make a change to your mortgage without considering maintaining your insurance policy – the existing policy is cancelled and your cannot utilize this towards accessing better interest rates for many years down the road.
The Bottom Line For Your Mortgage
If mortgages aren’t complicated enough – the past five years have made them almost indecipherable code unless you are maintaining ongoing full time industry education. My goal is to be a useful resource to my clients in using every advantage available towards your best interest. The bottom line for your mortgage is, more than ever before, to have a dedicated expert in your corner that will keep you updated as to exactly how the fast changing Canadian financial landscape will affect you and your family. Contact me before your maturity to see how we can use the rules to your favour.
