Understanding Mortgage Insurance: Your Options Explained
Dean Garrett • April 2, 2024
As your trusted Mortgage Professional, I'm here to ensure you're fully informed about protecting your mortgage and your family's financial future. You can’t buy Life Insurance when you need it! You need to plan and invest in your family's security now. Don’t buy Life Insurance from your Bank. It can’t move with your mortgage and will cost you much more.
Let's dive into the world of mortgage insurance and explore your options.
Manulife Mortgage Protection Plan (MPP)
MPP is designed to safeguard mortgage holders and their families in the event of an accident or health issue. While it's not mandatory, as your mortgage broker, I'm obligated to offer this product to ensure your peace of mind.
Here's what you need to know:
- Underwritten at application: Expect a call from an MPP representative within 10 days of completing the application.
- Two crucial questions: Consider whether you have adequate life insurance coverage and whether your disability plan is sufficient to cover mortgage payments and living expenses in case of illness or injury.
- Key features: Enjoy a 60-day refund option, portability between lenders and properties, and the flexibility to adjust premiums based on mortgage changes.
Better Mortgage Insurance:
While banks offer mortgage insurance, there are alternative options worth exploring. Better Mortgage Insurance offers smart, flexible solutions tailored to your needs:
- Coverage flexibility: Choose from coverage terms ranging from 15 to 35 years with life insurance coverage up to $4,000,000.
- Additional protection: Options include disability insurance coverage up to $3,500 a month and critical illness coverage up to $25,000.
- Premium guarantees: Rest assured knowing that premiums will never increase, and coverage stays with you regardless of where you bank.
Why Choose Mortgage Insurance?
Your home is your biggest investment, representing your retirement fund and estate. By securing adequate mortgage insurance, you protect it from unforeseen circumstances, ensuring financial stability for you and your loved ones.
Let's Connect
If you're considering mortgage insurance or want to explore comprehensive life insurance options, I'm here to help. Contact me today to discuss your unique needs and find the right protection for your mortgage and your future.
Dean Garrett
Mortgageminder - Your Mortgage Professional
Dean Garrett
Mortgage Professional
Did you know there’s a program that allows you to use your RRSP to help come up with your downpayment to buy a home? It’s called the Home Buyer’s Plan (or HBP for short), and it’s made possible by the government of Canada. While the program is pretty straightforward, there are a few things you need to know. Your first home (with some exceptions) To qualify, you need to be buying your first home. However, when you look into the fine print, you find that technically, you must not have owned a home in the last four years or have lived in a house that your spouse owned in the previous four years. Another exception is for those with a disability or those helping someone with a disability. In this case, you can withdraw from an RRSP for a home purchase at any time. You have to pay back the RRSP You have 15 years to pay back the RRSP, and you start the second year after the withdrawal. While you won’t pay any tax on this particular withdrawal, it does come with some conditions. You’ll have to pay back the total amount you withdrew over 15 years. The CRA will send you an HBP Statement of Account every year to advise how much you owe the RRSP that year. Your repayments will not count as contributions as you’ve already received the tax break from those funds. Access to funds The funds you withdraw from the RRSP must have been there for at least 90 days. You can still technically withdraw the money from your RRSP and use it for your down-payment, but it won’t be tax-deductible and won’t be part of the HBP. You can access up to $35,000 individually or $70,00 per couple through the HBP. Please connect anytime if you’d like to know more about the HBP and how it could work for you as you plan your downpayment. It would be a pleasure to work with you.
The idea of owning a vacation home—your own cozy escape from everyday life—is a dream many Canadians share. Whether it’s a lakeside cabin, a ski chalet, or a beachside bungalow, a second property can add lifestyle value, rental income, and long-term wealth. But before you jump into vacation home ownership, it’s important to think through the details—both financial and practical. Start With Your 5- and 10-Year Plan Before you get swept away by the perfect view or your dream destination, take a step back and ask yourself: Will you use it enough to justify the cost? Are there other financial goals that take priority right now? What’s the opportunity cost of tying up your money in a second home? Owning a vacation home can be incredibly rewarding, but it should fit comfortably within your long-term financial goals—not compete with them. Financing a Vacation Property: What to Consider If you don’t plan to pay cash, then financing your vacation home will be your next major step. Mortgage rules for second properties are more complex than those for your primary residence, so here’s what to think about: 1. Do You Have Enough for a Down Payment? Depending on the type of property and how you plan to use it, down payment requirements typically range from 5% to 20%+ . Factors like whether the property is winterized, the purchase price, and its location all come into play. 2. Can You Afford the Additional Debt? Lenders will calculate your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to assess whether you can take on a second mortgage. GDS: Should not exceed 39% of your income TDS: Should not exceed 44% If you’re not sure how to calculate these, that’s where I can help! 3. Is the Property Mortgage-Eligible? Remote or non-winterized properties, or those located outside of Canada, may not qualify for traditional mortgage financing. In these cases, we may need to look at creative lending solutions . 4. Owner-Occupied or Investment Property? Whether you’ll live in the home occasionally, rent it out, or use it strictly as an investment affects what type of financing you’ll need and what your tax implications might be. Location, Location… Logistics Choosing the right vacation property is more than just finding a beautiful setting. Consider: Current and future development in the area Available municipal services (sewer, water, road maintenance) Transportation access – how easy is it to get to your vacation home in all seasons? Resale value and long-term potential Seasonal access or weather challenges What Happens When You’re Not There? Unless you plan to live there full-time, you'll need to consider: Will you rent it out for extra income? Will you hire a property manager or rely on family/friends? What’s required to maintain valid home insurance while it’s vacant? Planning ahead will protect your investment and give you peace of mind while you’re away. Not Sure Where to Start? I’ve Got You Covered. Buying a vacation home is exciting—but it can also be complicated. As a mortgage broker, I can help you: Understand your financial readiness Calculate your GDS/TDS ratios Review down payment and lending requirements Explore creative solutions like second mortgages , reverse mortgages , or alternative lenders Whether you’re just starting to dream or ready to take action, let’s build a plan that gets you one step closer to your ideal getaway. Reach out today—it would be a pleasure to work with you.
