So the Canadian Mortgage and Housing Corportation was created in 1946 to help veterans purchase homes. Likely they helped many of our grandparents buy their first home and we have no idea what a great impact that has had on our own financial situation today.
For almost all Canadians, the most insurmountable obsticle to owning a home is saving the 20% payment that mortgage lenders require. The average price of simple townhouse in Calgary has risen to $359,345. In order to save up the $71,869 for a down payment you have to be house poor for years before you even set foot in your house!
The CMHC, for a small fee inlcuded in your mortgage payment, let's a mortgage company know, 'This guy is going to pay their mortgage. If they don't, I'll cover it.'
For some reason, the rest of the world hates the CMHC for doing that. I think it's pretty awesome.
In Canada we value home ownership. Home ownership always will be a phenomenal investment. It goes up in value while you pay it off, and has real, tangable value. The majority of our time is spend in it. More of our money goes toward payements, maintenance, and upgrades then anything else. Owning our own home gives us a control of our life and finances that is a key component, I believe, to a healthy self-esteem and confidence.
Likely, you are one of the 65% of home owners in Canada who have an insured mortgage. Likely, you are buidling enough equity in your home that one day you won't need it anymore. But your kids will.
I like the CMHC. More than Iike Mickey Doyle. I wanted to compare them to Richard Harrow becuase he's so awesome, but then you'd imagine the CMHC is ahaving half a face to killing everyone.
PS: There's another company called Genworth that is not government owned and also insures mortgages. They're more like Arnold Rothstein. Harder to get money from much more viscios if you don't pay up.
PPS: While mortgage loan insurance a wonderful thing. It should not to be confused with mortgage life insurance which guarantees that your remaining mortgage at the time of your death will not be a burden to your estate. Mortgage Life Insurance is complete crap. More on that in an upcoming blog.