Buyers : Tips

Mortgage Protection

Protects the owner in case of loss of employment. Mortgage payments can be reimbursed for up to 12 months or $15,000

La Capitale Real Estate Network, hereinafter referred to as La Capitale, hereby guarantees the borrower, in the event that the latter loses his/her job, reimbursement of payments equivalent to his/her monthly mortgage payments (principal and interest only), subject to a maximum of fifteen thousand dollars ($15,000).

Loss of employment income

Subject to the exclusions and eligibility conditions, loss of employment income means the loss of more than 50% of the employment income of a single borrower and of more than 50% of the total employment income when there is more than one borrower; in this case, all amounts received as an indemnity, a departure allowance, severance pay or a separation allowance are considered to be employment income. The compensation paid to elected public officials is excluded. If there is more than one eligible borrower, the Protection will only apply to the portion of total employment income lost. For a building comprising more than one dwelling, only the mortgage payments for the dwelling occupied by the borrower will be covered.

Eligible borrowers

To be eligible, the borrower must:

1. Be between 18 and 65 years of age.
2. Have been gainfully employed for at least twelve (12) consecutive months in a job providing thirty (30) hours or more of work per week, when this Protection took effect.
3. Be a Canadian citizen and a Quebec resident from the date this Protection took effect or have resided in Quebec for at least three (3) years.
4. Be a client of La Capitale Real Estate Network or one of its franchisees, for the transaction involving the property to be mortgaged.

Eligible loans

To be eligible for this Protection, each loan must satisfy the following conditions:

1. Be secured through a mortgage representative duly approved by La Capitale Real Estate Network.
2. Be amortized over a period of ten (10) years or more.
3. Be granted with respect to a residential building of one (1) to five (5) units, at least one (1) of which is occupied by the owner at the time of the loss of employment income.
4. Be granted for a minimum closed term of one (1) year.

Exclusions

The Protection does not apply whenever the loss of employment income is due to one of the following:

1. Disability.
2. Voluntary resignation or retirement.
3. Pregnancy, childbirth, miscarriage.
4. Abusive use of medication, drugs or alcohol.
5. Dismissal for reason of dishonesty, fraud, conflict of interest, refusal to carry out normal job functions, voluntary inappropriate or criminal conduct.
6. War, riot, civil uprising, nuclear accident.
7. Recurrence of circumstances known to the borrower, on or before the date of the notarized deed, that would have given rise to a claim under the Protection in twelve (12) month period for it took effect.
8. Labour dispute, strike, lockout.
9. Termination of employment arising from a layoff program initiated by the employer prior to the Protection coming into force.
10. Dismissal, layoff or termination of employment for any reason whatsoever if the borrower directly or indirectly exercises control over the company employing him/her or if the borrower is related (common law spouse included) to the person who directly or indirectly exercises control over the company that employs him/her.
11. Borrower covered under another mortgage protection plan.

Termination of Protection

The Protection shall terminate automatically whenever the borrower recovers 75% of his/her original employment income or at the end of the twelve (12) month period from the date of the notarized deed, except in the event of an extension granted in accordance with the provisions of the preceding paragraph.

Waiting period

In the event of loss of employment, each claim for coverage will be subject to a waiting period of thirty (30) days, unless the borrower submits a subsequent claim within ninety (90) days of a preceding claim. If, at the end of the waiting period, employment income has been restored, no payment will be made for the waiting period. If, at the end of the waiting period, employment income has not been restored, payments may begin, including payments related to any amount due during the waiting period.

Claims

La Capitale will only reimburse mortgage payments for which they have proof of payment on file. Claims must be submitted to La Capitale within 60 days of the loss of employment.

Effective date of the Protection

The date the deed of sale is signed before a notary.

Term of Protection

The maximum term of Protection is twelve (12) months from the date of the notarized deed, except if the loss of employment income occurs in the last three (3) months of the aforementioned period of Protection, in which case the borrower will be entitled to a maximum Protection period of three (3) months.