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Old 04-13-2015, 12:22 PM   #8
Mortgage Made Easy
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Join Date: Sep 2014
Location: Calgary, AB

Originally Posted by mrkajz44 View Post
Not that this really changes anything, but can someone explain these fees to me?

I bought a house recently and went through all of the paperwork regarding these fees. As I understand it, I pay these premiums because I cannot get 20% down. That is fine. However, my lawyer said if I default, I would still be legally liable for the mortgage amount, should the bank wish to pursue that avenue.

I get that if I default, I likely have very little in the way of other assets, but it seems like I am paying a premium (CMHC fees), but subsequently getting no protection. Is this correct?

The lawyer is correct. You are liable for the mortgage even if you don't pay. Like any loan, the lender has a duty to recover the loan and if they cannot the insurance is in place for the loss.

The insurance is for the investor who has provided the funds to the lender and and then has lent to the consumer.
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