Vancouver Ethiopian Blog

Ethiopian life in Vancouver, BC, Canada

To Buy a House or Not to Buy – Part 2

Last week, I discussed “To Buy a House or Not to Buy – Part 1“.

In this “To Buy a House or Not to Buy – Part 2” article, I originally wanted to compare buying vs. renting a house. However, late last week, Berhanu, one of the Vancouver’s Ethiopian community members, suddenly passed away.

Therefore, I have decided to dedicate this post to Berhanu and publish a timely article regarding mortgage insurance. The comparison that I planned on publishing today, Renting Vs. Buying, will be discussed in Part-3 next week.

Rest in Peace
Firstly, I want to extend my condolences to Berhanu’s family. I only met Berhanu a couple of times in town, but I hear that he was a good man. He suddenly passed away on Sept 16, 2009 while asleep at the age of 42. He was married with a one year old child. May his soul rest in peace.

I encourage you to read this mourner’s prayer on behalf of his family:

May His Great Name grow exalted and sanctified. Amen! In the world that He created as He willed. May He give reign to his kingship in your life times and in your days. Amen!

May God’s Name be blessed forever and ever!
Blessed, praise, glorified, exalted, extolled, mighty, upraised, and lauded be the Name of the Holy One, Blessed is He exceedingly beyond any blessing and song, praise and consolation that are uttered in the world. Amen!

May there be abundant peace from Heaven, and life up on us. Amen!

Berhanu’s unexpected death brings a lot of questions in the minds of all Ethiopians in the Vancouver area:

  • Did he have a mortgage insurance?
  • Did he have a life insurance?
  • Did he have an extended medical insurance at work?
  • What is going to happen to his widow and child?

These are very valid questions that one must think before buying a house. These questions are especially important to those who have a young family.

If you are interested to buy an insurance, there are many insurance companies in town, including all of the major chartered Canadian banks. You can try searching for some insurance companies in the Vancouver area here. It appears that Canadian Protection Plan (CPP) is offering a wide selection of insurance services at affordable prices. Check out CPP’s website here.

CMHC Insurance is not Life Insurance
In my Part-1 article, I mentioned that, one can buy a house with as little as 5% down payment. However, if the down payment is less than 20%, the lending institution will force you to buy a “mortgage insurance”. This insurance is from Canadian Mortgage and Housing Corporation (CMHC) and is designed to protect the lending financial institution, not the buyer (borrower). More detailed frequently asked questions (FAQs) list is found here.

This means, if you want to protect yourself, you must buy a separate (other than the CMHC insurance) mortgage insurance or life insurance. This insurance could protect your family from accidental death and/or chronic illness, like cancer. The monthly premium is based on a number of factors, like: the borrower’s age, mortgage amount, gender, if you are smoking or not, and many other factors.

In my opinion, having a mortgage or life  insurance (or both) is a good idea, especially, if you have a family, with children. Just remember that a mortgage insurance only covers your outstanding mortgage balance, as such, it goes less and less by the month as you pay your monthly payments. However, a life insurance protects you for a pre-determined amount and does not vary.

About CMHC:
Canada Mortgage and Housing Corporation (CMHC) is Canada’s national housing agency. Established as a government-owned corporation in 1946 to address Canada’s post-war housing shortage, the agency has grown into a major national institution. CMHC is Canada’s premier provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs, and housing research.

For more information about CHMC, go to its website:
http://www.cmhc-schl.gc.ca/en/

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September 24, 2009 - Posted by | Ethiopian Businesses, Ethiopian Careers, Ethiopian Investments, Ethiopian Parenting, Ethiopian Proverbs, Ethiopian Religions, Ethiopian Socials, Ethiopians in Vancouver | , , , , , , , , , , , , , , , , ,

2 Comments »

  1. […] I published a few more posts after that – To Buy a House or Not to Buy (Parts 1), To Buy a House or Not to Buy (Parts 2), To Buy a House or Not to Buy (Parts 3),  Thanksgiving and the Ethiopian Community of British […]

    Pingback by Just How Big is the Internet? Let us Print the Entire Internet, Honey! « Vancouver Ethiopian Blog | October 22, 2009 | Reply

  2. […] Sept 24:  To Buy a House or Not to Buy – Part 2 […]

    Pingback by Ethiopian Vancouver Blog: Looking at My 2009 Posts « Vancouver Ethiopian Blog | January 6, 2010 | Reply


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