Which type of mortgage insurance is required when a borrower has a down payment of less than 20%?
Correct Answer
B) Mortgage default insurance
Mortgage default insurance (also called mortgage loan insurance) is required when the down payment is less than 20% of the price, because the loan then exceeds 80% of the property's value. It protects the lender if the borrower defaults and is provided by CMHC, Sagen or Canada Guaranty.
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Which type of mortgage allows borrowers to make additional payments toward the principal without penalty?
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