Deadline for higher mortgage default insurance premiums is knocking

Mortgage Default InsuranceCome June 1st, the cost of mandatory mortgage default insurance is going up by approximately 15 percent. If you are planning to purchase a home with financing above 90 percent loan-to-value (LTV), at today’s mortgage default insurance rates, you better act fast. To avoid getting hit with the higher insurance premiums, your request for mortgage default insurance must be submitted prior to June 1st. That’s nine more days, including today.

For the average Canadian homebuyer with less than 10 percent down, the higher insurance premiums represent an increase of approximately $5 to the monthly mortgage payment. The higher insurance premiums do not affect financing below 90% LTV.

To learn more, go here – http://www.cmhc.ca/en/corp/nero/nere/2015/2015-04-02-1605.cfm 

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Credit score. Do you have one?

As we like to say in the business, no score, is as good as having a bad score. Banks rely on your credit profile as part of the adjudication process when underwriting your loan application. If your profile is too thin, you won’t generate a credit score.

The numerical credit score is between 300 and 900. You should be aiming for 900, but in over 20 years, the best I’ve ever seen is 850. The score is a quick reference for lenders, and plays a big part in the decision to approve or decline your application, especially when they’re busy. It can also affect what rate you get with some lenders. It’s determined by a number of variables contained in the balance of your credit report. Most conservative “prime” lenders will decline your application automatically with a score under 620.

Make sure you have done everything possible to improve your score BEFORE you apply for a mortgage. To learn more about doing that, visit the page on MortgageResource.ca here – http://mortgageresource.ca/credit_report/.