Mortgage insurance in B.C. (British Columbia) is a competitive field these days. Savvy consumers know that there are more options than the bank mortgage insurance that mortgage brokers offer upon closure. According to Canadian law, a mortgage broker is required to offer mortgage insurance in B.C. In fact, if the mortgage is for more than 80% of the home value, it’s required.
Keep in mind that there are two types of mortgage insurance. You have the collective or group mortgage insurance that most consumers purchase at closing, and then there is personal mortgage insurance.
There are many advantages and disadvantages to the type of mortgage insurance you purchase.
• Collective insurance can cancel the policy anytime.
• Personal insurance may not cancel coverage.
• Collective insurance will raise your rates without notification.
• Personal insurance will notify you of any rate increases first.
• Collective insurance policies are held by the lender and all premiums are paid to the lender.
• Personal insurance puts all the power in the consumer’s hands and issues all premiums in their name.
• Collective insurance only pays off the mortgage.
• Personal insurance pays the mortgage off and any money left goes to those left behind.
• Collective insurance is cancelled if you go in arrears.
• Personal insurance stays intact even if you are late on payments.
• Collective insurance is known for having unforeseen reasons to deny a claim.
• Personal insurance discloses everything upfront.
• Collective insurance is not required to train their staff.
• Personal insurance has licensed professionals.
With this in mind, it is no wonder that more people are making the switch to personal mortgage insurance in British Columbia.
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