How Much Does CMHC Mortgage Insurance Cost?

To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.

The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.

Remember: without mortgage insurance you may avoid the insurance premium but you’ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved.

A 10% premium refund and extended amortization period without surcharge may be available when CMHC Mortgage Loan Insurance is used to finance.

How much will it really cost?

Once you have figured out the home price range you can afford and the type of mortgage you qualify for, you will need to calculate all of the associated costs of the transaction to make sure you are financially ready.

Upfront Costs

You will need to plan ahead to cover the many up-front costs of buying a home. Timing is important to help make sure things go smoothly.

• Mortgage Loan Insurance Premium - If yours is a high-ratio mortgage (less than 20% down payment), your lender may need mortgage loan insurance. Your lender may add the mortgage insurance premium to your mortgage or ask you to pay it in full upon closing.

• Appraisal Fee - Your mortgage lender may require that the property be appraised at your expense. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services.

• Deposit. This is part of your down payment and must be paid when you make an Offer to Purchase. The cost varies depending on the area, but it may be up to 5% of the purchase price. If you wish to make a down payment of 5% and you give a deposit of 5%, then your down payment is considered to be made.

• Down Payment - With mortgage loan insurance from CMHC you can own your home with a minimum down payment of 5%. At least 20% of the purchase price is usually required for a conventional mortgage.

• Estoppel Certificate Fee (does not apply in Quebec). This applies if you are buying a condominium or strata unit and could cost up to $100.

• Home Inspection Fee - CMHC recommends that you make a home inspection a condition of your Offer to Purchase. A home inspection is a report on the condition of the home and generally costs around $500, depending on the complexities of the inspection. For example, it may be more costly to inspect a large home or one where issues such as moisture problems, pyrite, radon gas or urea-formaldehyde are suspected.

• Land Registration Fees (sometimes called a Land Transfer Tax, Deed Registration Fee, Tariff or Property Purchases Tax). You may have to pay this provincial or municipal charge upon closing in some provinces and territories. The cost is a percentage of the property’s purchase price and may vary. Check with your lawyer/notary to see what the current rates are.

• Prepaid Property Taxes and/or Utility Bills - To reimburse the vendor for prepaid costs such as property taxes, filling the oil tank and so on.

• Property Insurance - The mortgage lender requires this because the home is security for the mortgage. This insurance covers the cost of replacing your home and its contents. Property insurance must be in place on closing day.

• Survey or Certificate of Location Cost - The mortgage lender may ask for an up-to-date survey or certificate of location prior to finalizing the mortgage loan. If the seller does not have one or does not agree to get one, you will have to pay for it yourself. It can cost in the $1,000 to $2,000 range.

• Water Tests - If the home has a well, you will want to have the quality of the water tested to ensure that the water supply is adequate and the water is potable. You can negotiate these costs with the vendor and list them in your Offer to Purchase.

• Septic tank - If the house has a septic tank, it should be checked to make sure it is in good working order. You can negotiate the cost with the vendor and list it in your Offer to Purchase.

• Legal Fees and Disbursements - Must be paid upon closing and cost a minimum of $500 (plus GST/HST).Your lawyer/notary will also bill you direct costs to check on the legal status of your property.

• Title Insurance - Your lender or lawyer/notary may suggest title insurance to cover loss caused by defects of title to the property.

If you feel you cannot cover all of the up-front costs, you can ask your lender for a loan. Remember that payment for this loan amount, based on a 12-month repayment period, will have to be included in your

Other Costs

Besides up-front costs, there are other expenses to consider:

1. Appliances - Check to see what comes with the house, if anything.

2. Gardening equipment.

3. Snow - clearing equipment.

4. Window treatments - Check to see what comes with the house.

5. Decorating materials - Paint, wallpaper, flooring and tools for redecorating.

6. Hand tools -You will need some basic hand tools for your new home.

7. Dehumidifier - May be required to control moisture levels, especially in older homes.

8. Moving Expenses

9. Renovations or Repairs.

10. Service connection fees charged for utilities — telephone, gas, electricity, cable TV, satellite TV, Internet and so on. You may be asked to pay a deposit for some utilities.

11. Condominium Fees - You may have to make the initial payment for these monthly fees.

Buying a Home

Whether you’ve spent years saving and preparing to buy a home, or you’re unsure if you can afford it, the questions surrounding home buying can feel endless.

You can find the answers - and peace of mind - by working with Homelife, the industry leader in experience and service.

Here are some tips to help you become your own landlord through home buying.

1. Hire a real estate professional.

An important first step is selecting a home buying professional to help you find your dream home and fine-tune your financial expectations. Working with a buyer agent is worth consideration because he or she is legally responsible for representing the buyer’s interest in a real estate transaction. Before making a decision, however, have a REALTOR® explain the pros and cons of using a buyer agent versus a dual agent. Your Homelife Associate can guide you through every step of home buying.

1. Shop for mortgage rates and terms.
   A difference of even half a percentage point can mean a considerable savings over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years, that’s $12,600.
2. Prequalify for a loan.
   Also early on, you’ll want to get prequalified for a mortgage loan, which determines how much you can afford. It allows you to move swiftly when you find the right home, especially when there are other interested buyers. It also indicates to the seller that you are serious about home buying and can afford to buy the property.
3. Outline what you want.
   The next step in home buying is to create a realistic idea of the property you’d like to buy. What features are most important to you? Make two lists: one of the items you can’t live without and one of the features you would enjoy. Refine the lists as you house-hunt. It is also helpful to search online to see what is currently available on the market. Your real estate professional can then show you houses that meet your expectations.
4. Visit properties.
   Now you’re ready to visit houses. Ask your Homelife Associate to help in your home buying process by arranging showings. Be sure to keep track of the properties you’ve seen. Each time you venture out to see more properties, revisit your notes to immediately eliminate any that clearly do not meet your standards.
5. Know the features that help or hurt resale.
   In some areas, a swimming pool actually detracts from a home’s value and makes it harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may affect the home buying prospects and future value. Your Homelife professional can point out features that hurt or help resale value.
6. Rate the houses you tour.
   After touring each home, write down what you liked and didn’t like. Develop a rating system that will help narrow the home buying field. For example, pick the house you like best on day one and compare all other houses to it. When you find a better one, use the new favorite as the standard. Avoid trying to track more than four top choices at any given time since this can quickly become overwhelming.
7. Make an offer.
   Once you’ve pinpointed your dream house, it’s time to get serious about the financial and contractual side of the purchase. Let your Homelife Associate guide you through this sensitive home buying process. Because you and the seller have different goals, rely on your Homelife agent’s experience and expertise to bring order and calm to the process - and help both parties reach a favorable outcome.
8. Arrange for a home inspection.
   After your offer is accepted, set up a home inspection. It’s common to find problems, including leaky roofs, cracked walls, insect infestations and foundation problems. Your real estate professional can help find a reputable inspector, and will negotiate to get you the most for your money once the inspector’s report is final. If you negotiate repairs as part of the purchase, ask for a “walk through” before finalizing the home buying paperwork. Ask your real estate expert about home protection plans, which may save you money in the near future.
9. Close.
   Before your closing date, make sure you’ve made all necessary deposits and completed the paperwork - including mortgage, title, homeowner’s insurance and any other paperwork required by local or state governments when home buying. Your Homelife agent will be there to help you complete that closing checklist and avoid any last-minute snags. You deserve to enjoy every moment of the home buying process.

Prepare for life in your new home.
Before rolling out the welcome mat, consider some moving basics: arranging for an alarm company, turning on electricity, water and gas, cleaning or replacing the carpet, and notifying your local post office of your new address. The best time for renovations is often before you move in.

Selling a Home

As a real estate seller, you can play an important part in the timely sale of your property. When you take the following steps, you’ll help your Homelife Sales Associate sell your home faster, at the best possible price.

The easiest and most reliable way to improve the appeal of your home is to enlist a quality home service professional. The right professional can help real estate sellers get everything in order - from repainting the kitchen to arranging a thorough cleaning.

Guidelines for the real estate seller

1. Make the most of that first impression
   A well-manicured lawn, neatly trimmed shrubs and a clutter-free porch help real estate sellers put their best foot forward and make prospects feel welcome. So does a freshly painted - or at least freshly scrubbed - front door. If it’s autumn, rake the leaves. If it’s winter, shovel the walkways. The fewer obstacles between prospects and the true appeal of the real estate seller’s home, the better.
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2. Invest a few hours for future dividends
   Here’s your chance to clean up in real estate. Tidy the living room, the bathroom, the kitchen. If your woodwork is scuffed or the paint is fading, consider some minor touch-ups and redecorating. Real estate sellers can benefit from updating the hardware on kitchen cabinets, adding new slipcovers to sofas and keeping a vase of fresh flowers in the entryway. These are some of the simple touches that can go a long way. If you’re worried about time, hire professional cleaners or painters to help get your house ready. Remember, prospects would rather see how great the real estate seller’s home really looks than hear how great it could look “with a little work.”

3. Check faucets and bulbs
   Dripping water rattles the nerves, discolors sinks and suggests faulty or worn-out plumbing. Burned-out bulbs or faulty wiring leave prospects in the dark. Don’t let those problems detract from what’s right with your home.

4. Don’t shut out a sale
   If cabinets or closet doors stick in your home, you can be sure they will also stick in a prospect’s mind. Don’t try to explain away sticky situations when you can easily plane them away. A little effort on the real estate seller’s part can smooth the way toward a closing.

5. Think safety
   Real estate sellers learn to live with all kinds of self-set booby traps: roller blades on the stairs, festooned extension cords, slippery throw rugs and low-hanging overhead lights. Make your residence as safe as possible for visitors.

6. Make room for space
   Remember, potential buyers are looking for more than just comfortable living space. They’re looking for storage space, too. Real estate sellers should make sure attics and basements are clean and free of unnecessary items.

7. Consider your closets
   The better organized a closet, the larger it appears. Now’s the time to box up those unwanted clothes and donate them to charity.

8. Make your bathroom sparkle
   Bathrooms sell homes, so let them shine. Check and repair damaged or unsightly caulking in the tubs and showers. For added allure, real estate sellers should display the best towels, mats and shower curtains.

9. Create dream bedrooms
   Wake up prospects to the cozy comforts of your bedrooms. For a specious look, get rid of excess furniture. Colorful bedspreads and fresh curtains are a must if real estate sellers want buyers to be able to imagine relaxing there.

10. Open up in the daytime
    Let the sun shine in! Real estate sellers should pull back curtains and drapes so that prospects can see how bright and cheery the home is.

11. Lighten up at night
    Turn on the excitement buy turning on all your lights - both inside and outside - when showing your home in the evening. Lights add color and warmth, and make prospects feel welcome.

12. Avoid crowded scenes
    Potential buyers often feel like intruders when they enter a home filled with people. Rather than giving your house the attention it deserves, they’re likely to hurry through. Real estate sellers should keep the company present to a minimum.

13. Watch your pets
    Dogs and cats are great companions, but not when real estate sellers are showing their homes. Pets have a talent for getting underfoot. So do everybody a favor: Keep Kitty or Spot outside, or at least out of the way.

14. Think volume
    Rock-and-roll will never die. But it might kill a real estate transaction. When it’s time for a real estate seller to show the home, it’s time to turn down the stereo or TV.

15. Relax
    It’s best if you’re not there when your home is being shown. However, if that’s not possible, be friendly - but it’s not necessary to force conversation. Prospects want to view the home with minimal distraction from the real estate seller.

16. Don’t apologize
    No matter how humble your abode, never apologize for its shortcomings. If a prospect volunteers a derogatory comment about your home’s appearance, let your experienced Homelife Associate handle the situation.

17. Keep a low profile
    Nobody knows a home better than the real estate seller. But Homelife Sales Associates know buyers - what they need and what they want. Your Homelife Associate will have an easier time articulating the virtues of your home if you stay in the background.

18. Don’t turn your home into a second-hand store
    When prospects come to view your home, don’t distract them with offers to sell those furnishings you no longer need. You may lose the biggest sale of all.

19. Defer to experience - It’s the Experience®
    When prospective buyers want to talk price, terms or other real estate matters, let them speak to an expert - your Homelife Sales Associate. As the real estate seller, you might feel tempted to weigh in, but your two cents could cost you much more.

20. Help your agent
    Homelife Associates have an easier time selling homes if showings are scheduled through their offices and real estate sellers appreciate the results.