CHMC Premiums

[SanjivSheth]

Need Help Urgently!

I have recieved a approval on a re-financing (second one for this property) for one of my properties which is a tri-plex (in Toronto). The concern for me is that while this is great news; my CMHC premium is fairly substantial.

My original mortgage (at the time the first re-financing was done a few years ago) was $433K with $10K in CMHC Premiums.

The approval I have received for is as follows:
Mortgage = $486K
CMHC Premium = $25K
Total Borrowing = $511K.

This sounds like a great deal to me. How is the CMHS premium calculated? Does this make sense? Is there any-way I can reduce my premuim short of making the 20% down-payment?

Appreciate the help.

 

[ChrisDavies]

You can see the full table here (PDF) and an example from CMHC here.

The fees vary by LTV and amortization, but can be as high as 8%.

 

[SanjivSheth]

QUOTE (ChrisDavies @ Jul 24 2009, 10:34 PM) You can see the full table here (PDF) and an example from CMHC here.

The fees vary by LTV and amortization, but can be as high as 8%.

Thanks Chris. This is most helpful. One question remains. Given I re-fianaced earlier and paid $10k (on $433K mortgage) why am I paying a premium on the entire amount of my new loan i.e. $25K premium on re-fi (from $433 earlier) to $486k?

Is there a `double-count`? Should my new premium not be $25K - $10K = $15K???

 

[kboughen]

QUOTE (EffectiveResume @ Jul 25 2009, 05:19 AM) One question remains. Given I re-fianaced earlier and paid $10k (on $433K mortgage) why am I paying a premium on the entire amount of my new loan i.e. $25K premium on re-fi (from $433 earlier) to $486k?
A rental Triplex (you don`t live there), falls under the CMHC Small Rental Program, you can pay the CMHC "top up fee" for the extra funds received from the refinance. The fees are dependent on the LTV. You can see the rates and details at the link below.


http://investormortgages.zoomshare.com/files/CMHCrental.pdf

 

[MikeMcCrae]

Yes CMHC will allow you to pay fees only on the "new" money borrowed. You won`t have to pay on the whole amount of the loan because you already paid on a portion.

 

[Thomas Beyer]

QUOTE (MikeMcCrae @ Jul 27 2009, 04:23 PM) Yes CMHC will allow you to pay fees only on the "new" money borrowed. You won`t have to pay on the whole amount of the loan because you already paid on a portion.
actually no .. you pay premium always on the entire amount .. then get a (partial) credit on the premium paid a while ago !

CMHC insured money is getting QUITE expensive .. i.e. the last 5-15% over and above 80% LTV are quite costly !!! about 25-50% on the money (over 80%) borrowed .. so analyze the deal with 20% down .. and then with 5, 10 or 15% down and consider if this makes sense !