All About Mortgages

What’s There to Know?


Well, it has certainly been awhile. Certainly, I have failed in keeping up with my posts. However, there was a reason for that. I have found myself a job as a Software Engineer at a startup called Time.ly in Vancouver, BC. It’s certainly nice to be able to make a living again, but I am starting at a pretty rough place because the startup is so very disorganized.

At this moment, I feel like passing out, but I will do that after I finish this blog post about what I learned over the time I was absent. A friend of mine recently bought a condo and was raving about all these terms related to buying a place that was above and over me. I started researching about the process of buying a place and more specifically, mortgages.

I learned about credit scores, downpayments, assets, income, etc. and I even made a video that you can find here. It explains what a mortgage is and what you need to qualify for it. It’s very basic, so if you already know a lot about home purchases, you may want to skip it.

I’m from Canada and I really focused on Canada in that video. In it, I explained a little bit about CHMC or Canadian Mortgage and Housing Corporate – or Mortgage Insurance. Essentially, you pay a premium IF your downpayment is less than 20%.

So, let’s say that Jeff purchases a house with a 10% downpayment. The other 90% is from a mortgage. To protect the lenders, borrowers are forced to buy this mortgage insurance. The premium that they pay is based on their situation and is calculated by lenders. So basically, in a monthly mortgage payment you will pay for the interest of the mortgage + insurance premium + principle. If you had a downpayment of 20%, you only pay mortgage interest + principle. In this post, I really wanted to point out the insurance premium you’d pay if your downpayment is less than 20%. I feel a lot of people don’t know how much they lose to this insurance premium (or even knows about it). So, I wanted to bring it to light.

Of course, the video I made explains it in finer details, so make sure you watch it. Also, refer to the CHMC reference page to learn more about it. It is Canadian, but I believe USA also have the same kind of process to protect lenders. Sucks for us buying houses, but now you know what to expect.

(Actually, I made it easy for you to find the video *wink*)

Follow me for more tips and tricks and life hacks about how you can hack your financial life!

Yours truly,

Donald

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