Mortgage Broker

Consumer Guide 2015 mbabc.ca | 29 "Some of the covered title risks for residential properties include someone else claiming an interest in the title to your land, existing liens on title, encroachments or setback violations, tax arrears, existing work orders, adverse matters that would have been revealed by an up-to-date survey and, of course, fraud and forgery to the extent that they affect the title," says Magee. That means that if the previous owner bounced a cheque for the property taxes, if someone fraudulently transfers your property into his own name, takes out a mortgage and runs away with the money, or if a land survey failed to reveal that your garage is actually built partially on your neighbour's property and you have to rebuild it on your own land, you're covered against the cost of resolving these issues. Another particular benefit of title insurance is that the insurer is obligated to compensate you in case of loss as well as defend you in case of a dispute, so the insurance company will hire a lawyer to represent you if necessary. Also, most lenders accept title insurance in lieu of a survey or real property report, which saves money and speeds up the closing process. Basic coverage Homeowner's insurance is yet another type of insurance that all lenders require, as they want to know the mortgage will be paid should the building be damaged. Basic coverage insures you against fire, lightning strikes, windstorms, hail, freezing of the plumbing system and theft, says Cam Strong, CEO of Invis/Mortgage Intelligence. Popular additional riders include coverage in case of earthquake or flooding, and premiums for homeowner's insurance are paid annually. "One should purchase coverage at least equal to the estimated replacement cost of the home," explains Strong. "Replacement cost is the rebuilding cost necessary to repair or replace the entire home and is not the market value of the home, nor the home's purchase price or the cost of the land, nor the outstanding amount of any mortgage loan." Meanwhile, mortgage insurance – a type of creditor insurance – can offer peace of mind when it comes to securing your largest debt. "It's an affordable way to buy protection against financial hardship for you or your surviving family members in the event of death, disability or critical illness," says Strong. "With creditor life/critical illness insurance, the outstanding balance of your mortgage is paid off in the event of your death or a specified critical illness diagnosis. Creditor disability insurance has the benefit of paying your monthly mortgage payment if you become disabled." While you may have insurance coverage through work or elsewhere, policies and terms vary widely so it's important to check what you're actually covered for. Moreover, keep in mind that if your insurance is through your employer or purchased directly from your lender, you will lose your coverage if you leave your job or switch lenders when you renew. Your mortgage broker can refer you to an insurance broker that can provide portable coverage and competitive pricing. •

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