The total loan is automatically calculated for you taking into account the property value (Home price) and subtracting your down payment. However, as you may know, if your down payment is less than 20%, you will need to insure the loan (the mortgage).
This mortgage insurance, also called Mortgage Default insurance (MDI), protects Lenders in case you ever (god forbid) default on your mortgage.
There are 3 organizations in Canada that insure mortgages. The famous one is a crown corporation called CMHC / SCHL (Canadian Mortgage and Housing Corporation). The other 2 are Genworth Canada and Canada Guarantee.
If your mortgage needs insurance, the app automatically calculate the premiums and add it to your total loan. The mortgage payments are then re-calculated using the new loan amount.
CMHC has specific guidelines for insuring mortgages. We have done all that research and implemented the rules right into the app.
All you need to do is specify a home price and your down payment and the app will tell you when:
- Insurance is required and also calculates it and adds it to the loan
- Insurance is not required. Usually when you are over 20% down
- Insurance requirements are not met with a simple message to why