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First-Time Home Buyer

How Sagen Makes Homeownership Accessible for First-Time Home Buyers

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Options like mortgage default insurance are bringing the dream of homeownership within reach for more and more Canadians.

Buying your first home is exciting — but saving for a down payment can feel overwhelming. Your down payment is the key to becoming a homeowner and it’s easier to save when you plan ahead, research, and ask the right questions. The size of your down payment will help determine which mortgage option is best for you.

Home buyers have two options to consider: conventional mortgages, which require at least a 20 per cent down payment, and high-ratio mortgages, which have down payments of less than 20 per cent. High-ratio mortgages require mortgage default insurance, more commonly referred to as mortgage insurance, which helps qualified borrowers purchase a home with as little as a five per cent down payment. For example, if the right home for you has a purchase price of $800,000, in a conventional mortgage situation a lender would normally require you to provide a down payment of at least $160,000. With mortgage insurance, you can secure a mortgage with as little as $55,000 down (5% under $500k/10% between $501K – $1M).

Mortgage default insurance is what allows a potential home purchaser to access homeownership sooner. At Sagen, we want to provide first-time home buyers with the information they need to make good decisions and achieve their homeownership goals.

Sabrina Smith
Vice-présidente développement des affaires |
Vice President, Business Development

Mortgage default insurance under government regulations provides the purchaser with access to the housing market with a lower down payment. This insurance guarantees the mortgage by protecting the lender should the homeowner be unable to continue their payments. Mortgage default insurance is sometimes confused with mortgage protection insurance, which provides insurance protection on the mortgage in the event of death.

The added value of default mortgage insurance

With a Sagen-insured mortgage, an added benefit is the Homeowner Assistance Program, oftentimes referred to as HOAP, which helps qualified homeowners weather short-term financial hardships. Unforeseen life circumstances such as job loss, divorce, and illness may put pressure on household income, but they shouldn’t cost homeowners their home. For qualified borrowers, Sagen’s team can explore many options such as deferring payments to a later time, increasing the amortization period, initiating partial or shared payment plans, and more.

Mortgage default insurance is a win-win situation for home buyers and lenders. Lenders rely on it to protect themselves from financial losses in the event that a loan is not repaid. Because regulations require lenders to have this protection, they can offer loans with smaller down payments, if credit and legal requirements are met. For home buyers, mortgage default insurance allows access to homeownership sooner at a lower down payment, a competitive rate, or in some instances a better rate for an insured mortgage. Contact your mortgage provider at time of purchase for these options.

Home is where it all begins. Sagen’s mortgage insurance products are here to make your dream of homeownership a reality. Know your options and ask your mortgage professional which product is right for you.

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