financial fitness bootcamp - genworth financial · guarantees the mortgage by protecting the lender...

Front Cover

FinancialFITNESSBOOTCAMP

FIXED orVARIABLE

RATE?EnJoY SaVinGS on

HOMEOWNERSHIP EXPEnSES

FALL 2010

Buying for the first time? Do your homework first.

© 2010 Genworth Financial

Understanding mortgage options, the impact of rising interest rates and monthly payments,

will help you make an informed decision. Knowing all the various costs of buying a home

and purchasing within your means are the keys to homeownership. For easy to understand

homebuyer information about purchasing responsibly visit us at www.Homeownership.ca

Buying for the first time?Do your homework first.

Understanding mortgage options, the impact of rising interest rates and monthly payments,

will help you make an informed decision. Knowing all the various costs of buying and owning a

home and purchasing within your means are the keys to homeownership. For easy to understand

homebuyer information about purchasing responsibly, visit us at www.Homeownership.ca

http://www.homeownership.ca

HomeOwnership FALL 2010 | 3

MORTgAgE DEFAuLT INSuRANCE It all depends on the down payment.

FIXED OR VARIABLE RATE?What’s the difference?

FINANCIAL FITNESS BOOTCAMPHomeownership helps Canadians be fiscally fit.

TEST yOu HOMEBuyER IQ Prepare yourself for homeownership.

A Better Way to Home Ownership is published semi-annually by Genworth Financial Mortgage Insurance Company Canada (“Genworth Financial Canada”). A Better Way to HomeOwnership is protected by copyright and nothing may be reprinted wholly or in part without permission from Genworth Financial Canada. In compiling this publication, Genworth Financial Canada relies upon information supplied by a number of external sources. The publication was created on the belief of Genworth Financial Canada that all information in it was correct at the time of printing. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as the recommendation of Genworth Financial Canada. This publication has been prepared without regard to any particular investment objectives, financial situation, and needs. Genworth Financial Canada and related parties disclaim any and all liability and are not responsible in any way for the actions taken or results achieved by any person or organization in reliance on the information, stories or contributions in this publication. Accordingly, individuals should not act on any information within this publication without obtaining specific advice from their mortgage or investment advisors or from other professional advisors.

Published byGenworth Financial Canada

2060 Winston Park Drive, Suite 300Oakville, Ontario L6H 5R7

www.genworth.ca Genworth Financial Canada Editor Blake Atkinson Creative DirectorMike Friskney Contributing WriterSimon Moon Senior EditorEmily Moon Editorial AssociateAngela Wong Art DirectorsKamran Shafi

Designed by

139 Main Street, Suite 202 Unionville, Ontario L3R 2G6

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ContentsFEATurED ArTICLES

ADDITIOnS

5

6

9

10

WORkINg WITH A BROkERSaving you time and money. 12

RENOVATE AND ADD VALuEAdd the personal touch and increase the value. 14

kNOW WHAT yOu WANTFind a home that truly reflects your personal needs. 18

IS yOuR INCOME AT RISk?Your home doesn’t have to be. 22

6 | FALL 2010 HomeOwnership

Mortgage default insurance



The amount of money you save for your down payment will determine whether you will

require mortgage default insurance. If your down payment equals 20% or more of the price of your home, you will qualify for a conventional mortgage. If your down payment is less than 20% of the price of your home, you may need to take a high-ratio mortgage which will include mortgage default insurance.

WHAT IS MOrTGAGE DEFAuLT InSurAnCE?

Mortgage default insurance provides your lender with the flexibility to offer you the same competitive interest rates lenders offer to homebuyers with a larger down payment. It’s insurance, which guarantees the mortgage by protecting the lender should the homeowner be unable to continue their payments.

WHO PrOvIDES IT?There are currently two main

mortgage default insurance providers in Canada: Genworth Financial Canada and Canada Mortgage Housing Corporation, a government agency. Genworth Financial Canada, known as The Homeownership Company, is the largest private mortgage insurer in Canada.

WHAT HAPPEnS IF I AM unABLE TO PAY MY MOrTGAGE?

If you have a Genworth insured mortgage, you can take advantage of their Homeowner Assistance Program at no extra cost. The program enables you to work with your lender and Genworth to explore alternate arrangements if you’re faced with temporary financial difficulties that put your mortgage at risk. See article on page 22 for more information on the Homeowner Assistance Program.

MORTgAgE DEFAuLT InSurAnCE IT ALL DEPEnDS On YOur DOWn PAYMEnT.


For more information on Mortgage Default Insurance and the Homeowner Assistance Program please visit www.genworth.ca

MOrTGAGE DEFAuLT InSurAnCE PrOvIDES THE LEnDEr WITH THE FLExIBILITY TO OFFEr YOu THE SAME COMPETITIvE InTErEST rATES AvAILABLE TO HOMEBuYErS WITH A LArGEr DOWn PAYMEnT.

http://www.genworth.ca


FIXED OR vArIABLE rATE?

FIxED InTErEST rATE:• A predetermined interest rate that

will not change during the mortgage term thereby protecting you from increases in market interest rate.

• A fixed interest rate is often higher than a variable rate.

vArIABLE InTErEST rATE:• The interest rate will fluctuate with

the market’s interest lending rates, which usually follow the trend of the Bankof Canada posted rate.

• When interest rates go down a greater portion of your monthly mortgage payment will be allocated to the principal rather than to interest.

• A variable interest rate is less expensive than a fixed interest rate mortgage, usually about 1-2% lower, but there is a risk that the interest rate can increase at any time.

KEEP In MInD:• If you are a first-time homebuyer

with a high-ratio mortgage and you are looking to take a variable interest rate mortgage, you will need to qualify at the 5-year rate as posted by the

OnCE YOu HAvE quALIFIED FOr A MOrTGAGE, YOu WILL THEn nEED TO DECIDE IF YOu WAnT A FIxED Or vArIABLE InTErEST rATE. HErE ArE SOME THInGS TO COnSIDEr.

WHAT’S THE DIFFErEnCE?

Bank of Canada interest rate. This means that you must have the financial tolerance to afford the monthly payments as if you were applying for a 5-year fixed interest rate mortgage.

• This recent mortgage change was initiated by the federal government to help ensure that first-time homebuyers are capable of managing increased monthly mortgage payments in the event that interest rates were to rise considerably.

WHICH OnE SHOuLD YOu CHOOSE?• If you’re a person who would lose sleep

wondering how your monthly budget and mortgage payments would be impacted if interest rates went up by a percentage or two, then having a fixed interest rate mortgage is probably for you.

• If you’re a person who can cope with a little unpredictability and believe that over the long term you’ll come out ahead, a variable interest rate mortgage may be the right choice for you.

Be sure you speak with a mortgage professional about which option is best for your personal financial situation.


fixed or variable variablerates fixed or variable variablerates

financial boot camp financial boot camp


FINANCIAL FITnESS BOOTCAMP

OWnInG A HOME MEAnS MOrE THAn juST A PLACE TO EAT, SLEEP AnD rAISE YOur FAMILY. IT CAn ALSO BE An IMPOrTAnT STEP TO FInAnCIAL SECurITY.

HOMEOWnErSHIP HELPS CAnADIAnS TO BE FISCALLY FIT.

financial boot camp financial boot campA

recent study* shows that homeowners are in good shape when it comes to

financial fitness in Canada – 65% of homeowners pay off their credit card balances each month (vs. 48% of non-homeowners) and a quarter of those with mortgages have managed to make a lump sum payment or accelerate their mortgage payments within the past year.

“Homeownership helps Canadians focus on getting their financial situation in order,” said Peter Vukanovich, President and Chief Operating Officer of Genworth Financial Canada.

The survey also revealed that almost half (44%) of homeowners were able to pay all of their bills and save some money in the past year suggesting a strong correlation between homeownership and

financial fitness. Henrietta Ross, Chief Executive Officer of CACCS is impressed with the results but believes more work needs to be done.

“A mortgage is easier to manage when people have good personal finance skills,” she said. “But there is room to improve personal finance skills for many Canadians. Our certified Credit Counsellors and qualified Financial Coaches can help people get on track with their financial fitness so they can reach important life goals, such as homeownership.”

Genworth Financial offers a number of programs to help educate Canadians about home buying so they are fully prepared for the financial expectations.

*Study conducted by Genworth Financial Canada

As with regular exercise there is always room for improvement. Homeowners can still benefit from further education.

TEST yOuR HOMEBuYEr Iq

Be prepared by taking the online Homebuyer 101 course from Genworth Financial Canada. This interactive course reviews all aspects of the

THInKInG OF PurCHASInG YOur FIrST HOME?

homeownership process. When you’re done, you may test your knowledge with a quick quiz and then print a certificate of completion.


The steps in the home-buying process.

• Everything you need to know –from determining your budget to choosing a realtor.

The costs of homeownership.• Learn about all the costs that

are associated with buying, and moving into your first home.

The basics of carrying a mortgage.• Some quick tips to follow so

you don’t over-extend yourself financially.

• The different mortgage options and what’s the best one for you.

• Determine the best type and size of mortgage for you.

• The different terminology you’ll need to know and understand.

• Discover the difference between term and amortization.

• The benefits of paying off your mortgage sooner.

• Options available to you, if you suffer loss of income.

The importance of maintaining a good credit rating.

• Paying your monthly bills on time will ensure your credit rating remains in good standing.

Find out how paying just a little extra to your mortgage each year can make a big difference over the long term.

Take the Homebuyer 101 Course and prepare now for your homeownership journey. visit www.homeownership.ca

HOMEBuYEr 101 COvErS:

????


Take the Homebuyer 101 course and you will automatically be entered to WIN* 1 of 5 RONA

Gift cards for $500. Bring yourself up to speed on basic mortgage terminology and concepts.

Genworth Financial Canada’s Homebuyer 101 course, covers topics like; How does credit work?

Mortgage options – variable vs fixed and more. Visit Homeownership.ca to enter today.

*For full terms and conditions, please see www.homeownership.ca No purchase required. ©Genworth Financial Canada

win 1 of 5 ronA gift CArDs




WORkINg WITH A MOrTGAGE BrOKEr

There are over four hundred mortgage products on the market. Finding the one that’s right for you can be an

overwhelming task. So how do you source, assess and determine which mortgage is right for you? That’s where a mortgage broker can help.

A mortgage broker works on your behalf to find you the best mortgage at the best rate. They have no affiliation to any particular bank or financial institution, which means they are free to consider every product on the market before making their recommendation.

Working with your needs in mind, a mortgage broker will shop the marketplace, saving you time and effort. As well, a mortgage broker will already have relationships in place with a wide variety of lenders making it easier to negotiate favourable terms and competitive rates on your behalf.

HELPInG SAvE YOu TIME AnD MOnEY.

Your mortgage broker can also help with arranging your property survey, legal fees and closing paperwork while offering advice on any additional costs you may need more clarification on.

Best of all, working with a mortgage broker costs you absolutely nothing. It is the responsibility of the lender to compensate the broker with a fee when your mortgage is placed with them.

By investing a little time now and working with a mortgage broker you will save time, effort and money on your mortgage in the long run.

For more information or to contact a Dominion Lending Centres Mortgage Professional in your area please visit www.dominionlending.ca.

http://www.dominionlending.ca


working with a mortgage




RENOVATE AnD ADD vALuE TO YOur HOME

Renovating is a great way to add a personal touch to your new home while increasing its value.

Remember, your home is not only a place to live, it’s a long-term investment, as well. Here are a few renovations you may want to consider that will add to your enjoyment of the home as well as its resale value.

InTErIOr PAInTInG AnD DECOrATInGRefreshing your walls and ceiling with a new coat of paint gives a fresh look to your home and is one of the least expensive and most impactful things you can do.

THE KITCHEnThe kitchen is the heart of the home. Updating it will add instant value. If you do, make sure it is welcoming and inviting. Include well planned and ample work space and ensure a clutter-free environment by including plenty of storage space. Remember, a well-planned, functional kitchen will hold its value and have lasting appeal.

THE BATHrOOMUpdating your bathroom(s) is another shrewd renovation to consider. By completing a full bathroom renovation this will not only transform this space but can also provide you with a tranquil setting. Even smaller-scale enhancements such as

HELPInG IMPrOvE CurB APPEAL.

updating the mirror, vanity and lighting can make a dramatic difference.

FLOOrInG Worn or dated carpet and linoleum, or scratched hardwood floors can detract from your home’s appeal and value. Upgraded flooring adds style and drama. It also creates flow from room to room and can actually make a smaller home feel more spacious inside.

CLOSETSA home that has roomy, organized closets is a convenience you will never grow tired of, and will be a stand-out feature with future buyers, should you ever decide to move.

FInISHED BASEMEnT Whether it functions as a home theatre, games room, or just a play zone for the kids, a finished basement is an added feature that turns what is often a messy storage area into a vibrant living space.

EnErGY uPGrADESAdding or replacing a furnace, water heater, central air conditioning system, windows and/or a roof will give you peace of mind and lower energy costs for decades to come. It’s a wise investment regardless of whether you plan on staying in your home for the long term or selling it in the near future.

continued on page 16

RONAINSTALLATION SERVICEDoing it right, satisfaction guaranteed.

It’s SIMPLE We take care of all the details from start to finish. Satisfaction guaranteed.

It’s RELIABLE We’re available seven days a week. Plus, you enjoy our one year installation warranty.

It’s WORRY-FREE Thanks to our certified installers, your project is always installed to perfection.

Certain conditions apply. Details in store.Offered services might differ in all stores.

WANTS TO HELP YOU PERSONALIZE YOUR NEW HOME.

Exclusively for Genworth Financial Homebuyer Privileges™ Customers,

receive a

$55 RONA gift card when you spend $500 before taxes on a RONA Installation Service. For more information visit genworth.ca

• DECKS & FENCES• DOORS & WINDOWS• FLOORING

• KITCHENS• BATHROOMS

• ROOFING• HOT WATER TANKS

Installations are available at all RONA Home & Garden, RONA Lansing and select RONA Cashway stores. Not all services offered in all stores. See store for details. *Measure fee will apply. RONAdvantages: Offer may end or may be changed without notice. Terms and conditions available in store or on www.ronadvantages.ca. This promotion is valid until December 31st, 2010 at all RONA Home & Garden, RONA Lansing and select RONA Cashway stores only. Applicable before taxes on merchandise purchased in store and in one transaction. Only cash and carry purchases paid by cash, debit or major credit cards are eligible. This promotion includes Install labour as long as the labour is paid in full during the promotion dates. Unpaid balances, special orders or the purchase of RONA gift cards are not eligible for this promotion. Discount does not apply on the RONA price guarantee policy, layaways, in-house or contractor accounts and to clients with preferred contract pricing. The amount received in a RONA gift card is applicable on your next purchase only. Not transferable. No cash value. This offer may not be combined to any other offer. Certain conditions apply. See details in store. ®/TM Trademarks of AIR MILES International Trading B.V. used under license by LoyaltyOne, Inc. and RONA Inc.

TAKE ADVANTAGE

OFF your first purchase!

AIR MILES® for the first 30 days after signing up!

5x10% annual fee

$0See www.ronadvantages.ca or store for details.

The AIR MILES® Program, another great reason to shop at RONA!


DECK AnD LAnDSCAPInGA backyard deck or patio extends your living space to the outdoors, allowing you to gain a place to relax and entertain during the warmer months of the year. A landscaped yard will enhance curb appeal and transform an ordinary backyard into your personal oasis.

EnjOY SAvInGS On HOMEOWnErSHIP ExPEnSES

That’s why Genworth created the Homebuyer Privileges™ Program (HBP), an exclusive online discount program for commonly purchased household items

Renovate andadd value


such as appliances, moving services and rentals, home services, computers and more.

When you’re approved for a Genworth insured high-ratio mortgage from a participating HBP lender, you’ll receive a password enabling you to register as a new member on the program. Your membership will remain active for up to two years, giving you ample opportunity to save hundreds of dollars on many of your homeownership costs.

For more details ask a participating lender or visit www.genworth.ca



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WE SERVICE ALL MAKES AND MODELS, 24/7© 2010 Service Experts LLC. Service Experts, SAM and the Service Experts shield are registered and common law trademarks of Service Experts LLC. Cannot be combined with any other offers. Must present coupon at time of purchase. Some restrictions apply. Call for details. Promo Code: 21889

50% OFF$20 OFF

A system inspectiOn

A pRecisiOn tUne-Up

• Make sure your system is ready for the extreme temperatures ahead

OR

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To make certain your heating and cooling system doesn’t break down in winter and you aren’t paying higher energy bills than necessary year-round, call us.

Our 29-point visual system inspection can help you identify conditions now that may cause problems with your system during peak seasons. Plus, our comprehensive Precision Tune-Up and Cleaning will help your equipment operate at peak efficiency and extend service life.

Service Experts is a trusted leader in heating, air conditioning and indoor air quality. We offer our Five Standards of Excellence at every visit, and all of our work is backed by a written 100% Satisfaction Guarantee.

Service Experts is proud to offer 50% OFF an Inspection or $20 OFF a Precision Tune-Up.

Exclusively for Homebuyer PrivilegesTM customers. Visit Genworth.ca for more details.

As a Homebuyer privilegestm member, Let Us Help ensure your Heating And A/c system is in Good Working Order.


kNOW WHAT YOu WAnT BEFOrE YOu SHOP

BEGIn WITH THE BASICSDeciding on the location, or locations, where you will focus your search should

be your first priority. To determine potential locations, consider the following list of options:

THE “MuST HAvES” AnD “nICE TO HAvES.”

feature NeeD tO HaVe NICe tO HaVe NOt IMPOrtaNt

nEW nEIGHBOurHOOD

ESTABLISHED COMMunITY

CLOSE TO WHErE I WOrK

ACCESS TO MAjOr HIGHWAYS

CLOSE TO SCHOOLS

CLOSE TO PArKS & PLAYGrOunDS

In THE CITY

In THE SuBurBS

FInDInG A HOME THAT TruLY rEFLECTS YOur PErSOnAL nEEDS IS AS SIMPLE AS CrEATInG A LIST OF “MuST HAvES” AnD “nICE TO HAvES.” THIS LIST WILL HELP FOCuS YOur EFFOrTS AnD THE EFFOrTS OF YOur rEAL ESTATE AGEnT BEFOrE YOu EvEn BEGIn YOur SEArCH.



LArGE LOT

MATurE LOT

LAnDSCAPED YArD

PrIvATE YArD

GArAGE Or CArPOrT

DECK Or PATIO

SWIMMInG POOL

vIEW

nEW WInDOWS

nEW GArAGE DOOrS

nEW rOOF

BrICK

SIDInG

STYLE OF HOMENext, consider what style of home you would prefer: a single-family dwelling, a

townhouse, or a condo. Some neighbourhoods offer a good mix of each style while others are more focused on just one type of home.

THE ExTErIOrFirst you need to decide what is important to you when it comes to the exterior

of your home. Below is a list to help you prioritize what you would like.

continued on page 20


# OF BEDrOOMS

# OF BATHrOOMS

MASTEr BEDrOOM WITH EnSuITE

DInInG rOOM

LIvInG rOOM

MAIn FLOOr FAMILY rOOM

DEn/OFFICE

WOOD FLOOrS

EAT-In-KITCHEn

uPDATED KITCHEn

uPDATED BATHrOOMS

In-HOME GYM

FIrEPLACE

unFInISHED BASEMEnT

FInISHED BASEMEnT

InLAW SuITE

rEnTAL SuITE

STOrAGE SPACE

CEnTrAL vAC

SECurITY SYSTEM

nEW FurnACE

uPDATED WIrInG

uPDATED PLuMBInG

MOvE-In COnDITIOn

THE InTErIOrYou’ve decided on what your exterior needs are, now what about the interior?

Do you want a master bedroom with an ensuite? A main floor den? Would you be most comfortable with a house that is in move-in condition, or would you be willing to do a little bit of work on a fixer upper for a reduced price?

It’s important to make a list of everything you could possibly want, and then determine how important each item is. Below is a suggested list to help you with this task.


Be sure to ask a participating lender about the great savings offered through the Homebuyer Privileges™ Program.

As a Homebuyer Privileges™ member you will receive 20% off of our entire line!

Visit www.genworth.ca to find out more

Tunturi has been a trusted name in fitness equipment since 1922. Welcome us into your home and enjoy the benefits of achieving good health with sleek looking

and quality fitness equipment.


IS yOuR InCOME AT rISK? YOur HOME DOESn’T HAvE TO BE.

Sometimes, it can even put your ability to make your mortgage payments at serious risk. This scenario shouldn’t

mean that your home, and everything you’ve worked so hard to achieve, be in jeopardy. Often, there is help available if you know where to look.

Many Canadian homeowners, particularly first-time homebuyers carry mortgage default insurance on their home, in fact over 45% do. These individuals may have access to assistance programs to help modify their loans should they experience a temporary financial hardship.

For example, if you have a Genworth insured mortgage, you can take advantage of their Homeowner Assistance Program at no extra cost. The program enables you to work with Genworth and your lender to establish alternative arrangements so you can stay secure in your home when times get tough.

The Homeowner Assistance Program is for Canadians facing a variety of difficult situations, including:

WHEn LIFE DELIvErS An unExPECTED BLOW, LIKE A SErIOuS ILLnESS, A MArITAL SEPArATIOn Or LOSS OF EMPLOYMEnT, IT CAn BE DIFFICuLT TO STAY On TrACK.

✓ Work challenges, such as job loss, a strike,or even reduced income

✓ Health issues, such as injury or illness to yourself or a family member

✓ Life developments, such as marital separations or a death in the family

You also have the ability to review your options from the privacy of your own home by using the Homeowner Assistance Evaluator, a self-assessment tool that can be accessed online. It helps concerned homeowners better assess their financial situation and provides potential solutions to help you stay in your home.

With programs like this available to homeowners, a little bit of education and effort can make the difference between a negative outcome, and finding help when you need it the most.


To assess your own situation, visit www.HomeownerAssistance.ca or contact your lender.

http://www.homeownerassistance.ca

http://www.homeownerassistance.ca

financial fitness bootcamp - genworth financial · guarantees the mortgage by protecting the lender...

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