terms.
For example, the Loan-to Value (LTV) ratio is based on the appraised value. Buyers with a minimum down payment of at least 5% of the first $500,000 and 10% of the following $500,000 - $1,500,000 of the purchase price, but less than 20% must be backed by mortgage insurance. This protects the lender in the event that the home buyer defaults. These loans are known as “high LTV” or “high ratio” mortgages. In situations in which the buyer has 20% or more for a down payment, the lender or borrower could obtain “low-ratio” insurance that covers 100% of the loan in the event of a default. .Mortgage insurance is backed by the Canadian government through the Canada Mortgage and Housing Corporation (CMHC - Canada’s federal Crown corporation offering mortgage default insurance), Canada Guaranty Mortgage Insurance Company (a private mortgage insurer operating in Canada) and Sagen MI Canada Inc. (formerly Genworth Canada - the largest private-sector residential mortgage insurer in Canada) Assessed value is the amount local or provincial government has designated for specific property, and frequently differs from market value or appraisal value. This assessed value is used as the basis of property tax and when a property tax is levied. The assessed value of real property is not necessarily and very rarely equal to the property’s market value.
WHAT IS YOUR HOME WORTH?
The first step in selling your home is knowing the difference between value, worth, and price. Let’s examine the determining factors at work. Understanding those factors allows them to be leveraged. There are several ways a home’s value is derived.
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