Genworth vs CMHC

Should You Consider Genworth For Mortgage Insurance? Yes
When thinking about purchasing a home and sitting down with a calculator to establish how much you may be able to afford, be sure to consult with both a Realtor (hopefully myself) and your financial institution (*).
The reason I say this, is your lender may tell you that you could afford a (example) $200,000 home, but based on the insurance due on a high-ratio mortgage for a down payment of less than 35% (loan-to-value ratio), you will also have closing costs, which includes this insurance amount. The mortgage insurance will either be through Canadian Mortgage and Housing Corporation (www.cmhc-schl.gc.ca/en) or likely Genworth Financial (www.genworth.ca), which is a TSE traded company (MIC) and not a federal government agency.
If your savings amount to less than 25% down payment (Savings or equity from selling current home) on your chosen house, you will be required to pay this insurance. In fact, the percentage for most buyers with even 34.9% down is still 0.5% or $1,000 on a $200,000 mortgaged amount. You can visit the two above noted websites for more homework, charts and calculator tips, but it can be said that 5% down requires a 2.75% insurance fee on the amount you are borrowing.
Quite frankly, this creates an obvious safety net for the lenders, who must scrutinize who they hand out mortgages to (credit checks, etc), but it is also a terrific method of making Canadians home owners.
While much of this material has been presented in other writings, my point today is to ask your lender which direction they will go in underwriting your mortgage -- Genworth or CMHC. It might be important to attempt an affiliation with Genworth.
The other day I attended a morning seminar conducted by Rory Campbell of Genworth, and he made several very good salesmanship points about the company he is employed by.
In the worse-case scenario of losing your job or having an injury or illness preventing you from working for a few months, Genworth is the company that is ready to work with their clients/borrowers to keep them in their home, and not losing the house to a power of sale or foreclosure.
Genworth has 30 employees whose sole job is to negotiate 'workouts' with clients. With early intervention, Campbell notes, most people could stay in their house by deferring payments for a few months, increasing the amortization timetable or even receiving assistance in selling the house to cover (loan) any shortfalls.
The interesting statistic that Campbell noted was that in 2007 there were 450 'workouts' in Canada, but by 2011 that number had risen to 6200. Remember, the key to this mortgage insurance is to make it easier for home ownership for families.
Campbell's seminar also included terms such as shelter shock, beacon score and drive-by appraisal. In the end, it was a very informative course attended by many local Realtors.
(*) Your Mortgage
Just a quick reminder. If your mortgage is soon due for renewal or you are thinking of a move, give me a call to talk about house prices and what is available on the market, but also call me as I have many very good contacts at all five major banks in Woodstock, plus Rochdale Credit Union, and a mortgage advisor with Dominion Lending Services with more than 25 years experience. You will receive the best information and advice by going to the right people first.
I could show you a chart depicting that thanks to on-going low interest rates and the equity you currently have earned (low interest rates allow you to pay off your principle quicker), you could buy that larger home your family requires (is growing into) and maintain the same monthly payments you are already accustomed to.
Mark Schadenberg, sale rep
Royal LePage Triland Realty
www.marksells.ca
mschadenberg@rogers.com
Call or Text: (519) 537-1553
Office: 539-2070