- What is mortgage insurance?
There are two types of mortgage insurance. The first is a policy that protects lenders against losses that result from defaults on home mortgages, and it's required for borrowers making a down payment of less than 20 percent. If this insurance didn’t exist, lenders would not lend to that loan-to-value, which is the amount of the mortgage loan compared to the value of the property. Thus why insurance was created: To allow more people into the market.
Like home or auto insurance, mortgage insurance requires payment of a premium for protection against loss, and is used in the event of an emergency. If a borrower can't repay an insured mortgage loan as agreed, the lender may foreclose on the property and file a claim with the mortgage insurer for some or most of the total losses.
The second kind of insurance is what you take out in the event that something happens to you. This type of stand-alone insurance is a good idea because your mortgage is probably your single biggest liability, and if something were to happen to you, your partner, or both of you, you want to make sure that no one has to deal with that additional stress. Contact Auxilium Mortgage for more details. - Do I need homeowner’s insurance?
Yes. Home insurance is a key requirement for your mortgage. The Auxilium Team is happy to provide you with a referral to our trusted partners for a consultation and quote.
The Auxilium Team offers a complimentary consultation to start your home buying process; contact us today at 250-590-6520 (toll-free 1-855-590-6520). You can also visit us at 307 Goldstream Avenue during regular business hours. We can arrange an appointment evenings or weekends to work with you.
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.
This post reflects the best available information at the time of writing/last update. In order to ensure that you have the most up-to-date information, contact us to confirm the details for your specific situation.
Updated March 2018
This list originally appeared as part of 35 Questions to Ask When Buying a Home. See the entire updated list:
3 Questions to Ask When Buying a Home
7 Questions to Ask About House Hunting When Buying a Home
6 Questions to Ask About Financing When Buying a Home
4 Questions to Ask About Your Credit When Buying a Home
3 Questions to Ask About Mortgage Payments When Buying a Home
5 Questions to Ask About Working With a Mortgage Broker
5 Questions to Ask About Closing Details When Buying a Home
