M city 5 condos prices. It’s all over the Canadian real estate news! In the recent real estate news, we can see that the appearance rate of CMHC is quite high, so what kind of company is CMHC?Please Visit: M city 5 condos prices to Get Your VVIP Registration Today!
CMHC, whose full name is Canda Mortgage and Housing Corp., and translated as Canadian Mortgage and Housing Company, is a mortgage insurance company owned by the Canadian government.
With the gradual heating up of the Canadian housing market, we can also see the appearance of CMHC frequently in the recent news: to predict the housing market for a while, to investigate and study the data for a while. In short, everything in Canadian real estate seems to have the shadow of CMHC.
CMHC first appeared in 1944, when it was established by Congress to provide cheaper housing loans to World War II veterans. Although CMHC now has many functions and does a lot of things, the most important thing is to provide mortgage insurance.
Before we know what mortgage insurance is, we need to know the difference between Mortgage and Loan. As the name implies, mortgage is also a kind of loan, but it needs collateral.
If there is no mortgage for an asset that is so expensive to buy a house, the risk of bank lending is too great. So now when you borrow money from the bank to buy a house, you need to mortgage the house you bought to the bank; until you pay off the loan, the house belongs to the bank-so that if you are accidentally unable to pay off the loan, the bank can sell the house publicly to make up for the loss.
But if house prices are not high enough, banks will not be able to make up for lost loans from home sales. The smaller the down payment of the buyer, the higher the loan amount, and the greater the potential risk of the bank.
Do you remember the subprime crisis in the United States in 2008? At that time, interest rates rose and a large number of buyers with poor credit began to fail to repay their loans, so banks had to auction off those properties, so a large number of houses were auctioned on the market, and the increase in supply led to a decline in house prices, which made it impossible for the auction to sell at a good price. resulting in huge losses for banks, which triggered a series of financial crises.
That’s why you have to buy mortgage insurance (mortgage insurance) when you want to make a down payment of less than 20%. This insurance is used to protect the bank, not the buyer, but only in this way will the bank be willing to lend to you with a low down payment.
How low can the down payment be? According to the current regulations of CMHC, the down payment of houses under 500000 can be as low as 5%; for houses of 500000-1 million, the first 500000 must pay at least 5% down payment, and the rest must pay at least 10% down payment; for houses of more than 1 million. Sorry, the risk is too high, no insurance.
Then who will pay the insurance premium? Usually, the bank will let the buyer pay. The insurance premium is generally 1.8% of the loan, 3.15%, depending on how much you make the down payment, which will be added to your loan.
CMHC is not the only mortgage insurer in Canada. There are also two other privately owned mortgage insurers: Genworth Financial and Canada Guaranty Mortgage Insurance. The premiums of the three insurance companies are exactly the same, except that the approval conditions are sometimes different.
For some buyers, mortgage insurance is not necessary or even deductible, but it requires the buyer to negotiate with the bank. You can also go to the loan broker, who can not only help you get the lowest possible interest rate, but also help you choose one of the three insurance companies to insure.
In an earlier report released by CMHC, we can see that CMHC’s compulsory insurance fell to 526 billion yuan last year from 543 billion yuan in 2014. The maximum amount allowed by law is 600 billion yuan, which has been getting closer and closer before, but recently CMHC also realized that the risk was too high and began to reduce the amount of insurance.
CMHC’s net income after tax fell sharply from 262.5 billion yuan to 148.8 billion yuan last year. Last year, CMHC insured $553 billion worth of loans, covering 304518 homes. Of these, 353 million were reimbursed, down 9.5 per cent from 2014.
The rate of overdue debts last year was only 0.34%, almost unchanged from the year before. Buyers own an average of 46 per cent of their homes in CMHC-guaranteed loans, the same as in 2014.