Few people have the resources to pay outright for their new home. The vast majority needs to borrow money to help finance their purchase and will go directly to a financial institution such as a bank, trust company, credit union or caisse populaire, or they may work with a mortgage broker who will arrange a loan for them.
The process of getting mortgage insurance is easy and straightforward. After your lender has approved your mortgage in principle, they forward an application for insurance to a mortgage insurer. Applications for insurance can be processed and approved within minutes, or it may take longer if personal follow-up is required.
Home buyers are required to pay a mortgage premium. The rate is calculated as a percentage of the mortgage and depends on the size of your downpayment. The premium can be paid as a lump sum upfront, or it can be added to your mortgage and incorporated into your monthly payments.
Mortgage insurance is also portable. If you sell your home and transfer your mortgage to your new home, which is a common option offered by lenders, the mortgage insurance can be transferred as well. The insurance premium on the mortgage for your new home may be waived or offered at a very reduced rate, depending on the size of your new mortgage, the loan-to-value ratio and other factors.