The current law in Canada requires that any residential mortgage where the borrower has less than 20% down payment be insured against borrower default. The main insurer to the banks is CMHC (Canadian Mortgage & Housing Corporation) followed by Genworth, and Canada Guaranty. The insurance premiums are all the same among the three and depend on a few variables. In any regard, they can be a significant amount of money, in the tens of thousands of dollars added to the loan balance. The question often asked is how to avoid CMHC fees / can I avoid CMHC fees? Conversely, I hear prospective buyers say they are waiting to purchase until they have saved 20% in order to avoid CMHC fees. This article looks at the costs and benefits of CMHC ‘mortgage default insurance’ and whether or not it is a big deal.

Updated by Chris Richards on Jan 21, 2021 

As a licensed mortgage broker, the question often gets asked what do we do, and how are we different from a bank.

In this blog, I am going to briefly talk about being a mortgage broker in Alberta, however most lenders in Canada have a national focus, so arranging a mortgage in Edmonton or Calgary is the same process and the same rules as working with a borrower in Toronto, Vancouver or Halifax as examples. Happy to help, wherever you are!

1. What is a Mortgage Broker?

In a nutshell, they are independent, trained specialists licensed to represent and provide you with the best advice for your home or property financing needs. 

They are retained by the client to shop the mortgage market (including banks, trust companies and other financial institutions) and to provide independent advice in choosing a mortgage commitment to fit the client’s particular needs.

It is a similar service as that of an insurance broker or travel agent in that the professional is highly trained within a very complex industry.

• Often they can obtain home loan commitments with better terms, options and interest rates than the client can obtain on their own;
• Saves you considerable time and effort; and
• Potentially save thousands of dollars over the term of a mortgage.

The mortgage broker is typically paid a fee by the lender upon successful funding (no charge to client). If the broker intends to charge you a fee, as would be the case in commercial, agricultural, business and non-bank (private) lending, this must be disclosed up front to the client.

How to Buy a House in Canada

Last Updated: May 2019

In the past few weeks, I have had a number of first time home buyer clients purchasing a home, some with the aid of a Realtor and others without on a For Sale By Owner (FSBO).  With the aid of a real estate professional, a lot of the following questions get answered, but not always.  When you are pursuing a FSBO, it's a lot tougher to figure the steps out, especially for the rookies.

Here's an overview on the house buying process and steps in Canada.

1. Mortgage Pre-Approval
2. House Shopping and Price Discovery 
3. Offer to Purchase, Deposit and Home Inspection
4. Mortgage Approval Process
5. Closing, Get the Keys!

Last updated: May 2019