MORTGAGEBROKER mbabc.ca | 21
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Mortgage insurance portability
When a borrower already owns one property
and they come to you with a request to
nance a new property purchase, it is
important to investigate if the borrower
is eligible to port their existing mortgage
insurance policy. With mortgage insurance
premiums typically in the thousands
of dollars, portability of mortgage loan
insurance could save your customers
thousands on their new home purchase.
In your initial interview with the customer
ask for the source of the down payment. If
the source of the down payment is from the
sale of their existing property, they might
be eligible for portability premium savings.
Next, investigate if the existing mortgage
on the property the borrower is selling is
insured. e borrower may not know who the
insurer is, or be able to locate their mortgage
commitment from years back to identify the
insurer. e borrower will, however, typically
know the amount and percentage of their
former down payment. For instance, they will
likely remember and take pride in telling you
if they worked two jobs and didn't eat out for
three years in order to save their 5% down
payment on their rst home. Alternatively,
they may have been given an early inheritance
and put 35% down payment, which they will
also likely remember.
Once you have determined if the borrower
has a high ratio mortgage, the next step is to
determine which mortgage loan insurer has
insured the borrowers existing mortgage.
With the name of the borrower(s), existing
insured property address, and approximate
close date of the last mortgage closing, you
can reach out to your insurer partners. You
may need to call all three of the insurer
underwriting centres or your insurer
representatives until you track down the
provider of the original insurance. Once you
nd the source of the original insurance,
ask if they can assist you with the portability
options available for your customer. Provided
you have written customer consent, advise
the insurer of the consent and also advise
them that you are doing your homework
ahead of time to structure the application
accurately when presenting the new purchase
application to your lender underwriter for
ease and e ciency.
Important questions to ask your insurer
representative are: What is the minimum
down payment required in order to be eligible
for portability premium savings? What is the
maximum amortization the borrowers can
have on the new mortgage to be eligible for
portability? If the sale of the existing property
