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  Canada Immigration Forum > About Canada > Real Estate & Mortgages > Mortgage Insurance? CMHC/Genworth
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Mortgage Insurance? CMHC/Genworth




Dear Moderators/Members,

I believe that currently Mortgage Insurance is offered by Genworth Financial and CMHC. Is there any advantage/disadvantage to going with one over the other? Please do let me know.

Also, I read that early next year (2007) private companies from south of border might be entering the mortgage insurance market. If possible, could you please confirm and what impact if any it might have on the mortgage insurances.

Thanks.


 
rashmig

Junior Desi
Member since: Aug 03
Posts: 31
Location:

Post ID: 88924 02-11-06 11:56:37
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kanjis
Senior Desi
Member since: Mar 05




Posts: 103
Location: Toronto, Canada

Mortgage Insurers:
I have been in the mortgage business for somtime now and I do not see how one company or the other will benefit the consumer, however keeping in mind that CMHC has a Social Mandate while Genworth (sub. of GE CAPITAL & GE ELECTRICAL) has profitmaking mandate, Should some problem arise in the furture than CMHC (peoples institution) would be better institution to deal with.

The new players in town for Mortgage Insurance is \"AIG United Guranty Corp.\"


Mortgage Insurer

In Canada, institutional, high-ratio mortgages (those representing more than 75 percent of the property value) must be insured against default by either Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada. The borrower, as part of the borrowing process, will obtain and pay for the insurance, which protects the lender against default.

Using the above facility the banks will lend you upto 95% of the value of the Home purchase price and some will even go as high as 100%!!

I hope you find the above information useful. If you need further information on Mortgages please call me at 1 800 265 2694.

S. J. Kanji 1800 265 2694
HLC Mortgages Inc.
(HLC Home Loans Canada is a division of CIBC Mortgages Inc. in Saskatchewan,in all other Provinces 3877337 Canada Inc., a subsidiary of CIBC Mortgages Inc. carries on business as HLC Home Loans Canada)



-----------------------------------------------------------------
S. kanji
I may not agree with your opinions, but I will fight to death for you be able to air your views.

 
Post ID: 89044 04-11-06 05:27:45
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rashmig
Junior Desi
Member since: Aug 03




Posts: 31
Location:


Thanks Kanji.

 
Post ID: 89386 09-11-06 11:32:34
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bison
Senior Desi
Member since: Nov 04




Posts: 306
Location: Toronto, da BEST!!!


Quote:
Originally posted by kanjis

I have been in the mortgage business for somtime now and I do not see how one company or the other will benefit the consumer, however keeping in mind that CMHC has a Social Mandate while Genworth (sub. of GE CAPITAL & GE ELECTRICAL) has profitmaking mandate, Should some problem arise in the furture than CMHC (peoples institution) would be better institution to deal with.

The new players in town for Mortgage Insurance is \"AIG United Guranty Corp.\"


Mortgage Insurer

In Canada, institutional, high-ratio mortgages (those representing more than 75 percent of the property value) must be insured against default by either Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada. The borrower, as part of the borrowing process, will obtain and pay for the insurance, which protects the lender against default.

Using the above facility the banks will lend you upto 95% of the value of the Home purchase price and some will even go as high as 100%!!

I hope you find the above information useful. If you need further information on Mortgages please call me at 1 800 265 2694.

S. J. Kanji 1800 265 2694
HLC Mortgages Inc.
(HLC Home Loans Canada is a division of CIBC Mortgages Inc. in Saskatchewan,in all other Provinces 3877337 Canada Inc., a subsidiary of CIBC Mortgages Inc. carries on business as HLC Home Loans Canada)





I understand the need for an insurance product, should a fatality happen - That it should cover the house thats mortgaged plus provide for the family thats left behind... but... the question below pertains to the minimum requirement to buy a high-ratio mortgage.

If you take a high-ratio mortgage, Do you "have to" buy the insurance from CMHC or Genworth? What if you already have your own personal life policy?

What is the value of minimum insurance you are required to have? (same as the value of the house?)

What in addition to your personal life policy, You also have a group policy from your employer. Does that count towards this requirement?

:p Thanks, bison




 
Post ID: 93158 11-01-07 23:32:40
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Rajeev Narula
Senior Desi
Member since: Mar 05




Posts: 409
Location: Mississauga






I understand the need for an insurance product, should a fatality happen - That it should cover the house thats mortgaged plus provide for the family thats left behind... but... the question below pertains to the minimum requirement to buy a high-ratio mortgage.

If you take a high-ratio mortgage, Do you \"have to\" buy the insurance from CMHC or Genworth? What if you already have your own personal life policy?

What is the value of minimum insurance you are required to have? (same as the value of the house?)

What in addition to your personal life policy, You also have a group policy from your employer. Does that count towards this requirement?

:p Thanks, bison





Beneficiary of the \"mortgage DEFAULT insurance cover\" provided by CMHC & GENWORTH is the bank that is giving you the previlege of owning a home with as little as 5% down payment. In the event one is unable to continue to pay the instalments (mortgage), the Bank will EVICT him from the property and (try to) sell it to recover money owed. If there is a shortfall, then this default insurance will pay the bank their loss (provided the sale was done according to the procedures). In the event that the home sells for more than the money owed to the bank, those proceeds are the equity of the home and will be passed on to the last owner. Unfortuantely, the consumer is made to pay the premium that benefits the banks/lenders and not the buyers. On the other hand, this has allowed millions of people with the possibility of owning a home without much savings.

Personal (life) insurance coverage or the group insurance coverage from an employer protects one's family in the event of a situation where this person is no longer alive. The beneficiary of these coverages is not the bank and the survivors can choose to spend the money whichever way they feel like...pay off the mortgage/debts etc.

How much insurance is adequate? Suggest seek advice from a qualified insurance broker.

Hope this clarifies.

-----------------------------------------------------------------
Rajeev Narula, Broker, REALTOR
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK


 
Post ID: 93161 12-01-07 00:36:47
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bison
Senior Desi
Member since: Nov 04




Posts: 306
Location: Toronto, da BEST!!!


Thanks for a nice explanation Rajeev...

Tho, I am looking for a specific answer here (Hope i am making sense here ;) and am not offtrack)

a) If you already have your own personal life policy + group term, and
b) the total face value of these two policies is greater than the cost of the house, and
c) You are buying a house with a high ratio mortgate

Are you still required to buy the "mortgage DEFAULT insurance cover" ?
or
Because you already have life insurance policies that values more than the cost of the house, you dont "HAVE TO" take this "mortgage DEFAULT insurance cover" ?

Trying to see if a "mortgage DEFAULT insurance cover" can be avoided for a high ratio mortgage


Thanks, :p bison


 
Post ID: 93264 13-01-07 12:31:55
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Pramod Chopra
Senior Desi
Member since: Sep 03




Posts: 1284
Location: Pickering, ON


Quote:
Originally posted by bison

Thanks for a nice explanation Rajeev...

Tho, I am looking for a specific answer here (Hope i am making sense here ;) and am not offtrack)

a) If you already have your own personal life policy + group term, and
b) the total face value of these two policies is greater than the cost of the house, and
c) You are buying a house with a high ratio mortgage

Are you still required to buy the \"mortgage DEFAULT insurance cover\" ?
or
Because you already have life insurance policies that values more than the cost of the house, you don't \"HAVE TO\" take this \"mortgage DEFAULT insurance cover\" ?

Trying to see if a \"mortgage DEFAULT insurance cover\" can be avoided for a high ratio mortgage


Thanks, :p bison




Hi Bison,


Typically, lenders require mortgage loan insurance for loans made to anyone that wishes to purchase a home with less than 25% of the purchase price. The Canadian Bank Act prohibits most federally regulated lending institutions from providing mortgages without mortgage loan insurance for amounts that exceed 75% of the value of the home or purchases with less than 25% down payment.

Hence, If you buy a house with a high ratio mortgage which means that you are putting less than 25% down payment, you HAVE to take 'mortgage default insurance'. This covers your mortgage in case there is a default for any reason. This mortgage default insurance is provided either by CMHC, GENWORTH or the new entrant AIG. The premium depends on the percentage of down payment

However, there are some alternate lenders who would by pass this premium but would build up the cost in their rates.

Mind you that this mortgage default insurance for which you have to pay the one time premium protects only the lender in case you default but does not protect your house. For protecting your house, you have to take other insurances such as mortgage life insurance, personal life or term insurance etc.


Please do not confuse it with your personal life insurance no matter how much amount you have insured yourself for either with your personal life + group life + term life and or critical insurance life etc.

You can read more about it in my earlier posts on CD about various types of insurance by following these :

http://www.canadiandesi.com/read.php?TID=14562&page=2


http://www.canadiandesi.com/read.php?TID=14975&page=1#86934


Should you have questions, feel free to contact me.






-----------------------------------------------------------------


Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada



 
Last edited by: Pramod Chopra on 13-01-07 16:57:05
Post ID: 93266 13-01-07 12:53:26
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Rajeev Narula
Senior Desi
Member since: Mar 05




Posts: 409
Location: Mississauga


Quote:
Originally posted by bison

Thanks for a nice explanation Rajeev...

Tho, I am looking for a specific answer here (Hope i am making sense here ;) and am not offtrack)

a) If you already have your own personal life policy + group term, and
b) the total face value of these two policies is greater than the cost of the house, and
c) You are buying a house with a high ratio mortgate

Are you still required to buy the "mortgage DEFAULT insurance cover" ?
or
Because you already have life insurance policies that values more than the cost of the house, you dont "HAVE TO" take this "mortgage DEFAULT insurance cover" ?

Trying to see if a "mortgage DEFAULT insurance cover" can be avoided for a high ratio mortgage


Thanks, :p bison




Pramodji has given a good explanation to your question. I only want to add the following comment to your above question:

You are assuming that the only time there is a likelyhood of mortgage default is when you are no more since that is the only time when your insurances will pay-out. There may be situations beyond one's control in life (when you are still alive and kicking) when you may not be able to pay the mortgage. Mortgage Default Insurance is a remedy for the banks to recover thier bad debts in such instances. Hope this helped.

-----------------------------------------------------------------
Rajeev Narula, Broker, REALTOR
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK


 
Post ID: 93268 13-01-07 13:21:05
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investpro
Senior Desi
Member since: Nov 06




Posts: 1628
Location: carl sagan's universe


Quote:
Originally posted by Rajeev Narula



Pramodji has given a good explanation to your question. I only want to add the following comment to your above question:

You are assuming that the only time there is a likelyhood of mortgage default is when you are no more since that is the only time when your insurances will pay-out. There may be situations beyond one's control in life (when you are still alive and kicking) when you may not be able to pay the mortgage. Mortgage Default Insurance is a remedy for the banks to recover thier bad debts in such instances. Hope this helped.



Like for instance a marriage breakdown, which according to stats is one of the principal reasons for foreclosure.



 
Post ID: 93277 13-01-07 16:14:58
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Pramod Chopra
Senior Desi
Member since: Sep 03




Posts: 1284
Location: Pickering, ON


deleted...


duplicate post. sorry....

-----------------------------------------------------------------


Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada



 
Last edited by: Pramod Chopra on 13-01-07 16:56:16
Post ID: 93279 13-01-07 16:52:34
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Contributors:
bison(5)  investpro(2)  kanjis(1)  Pramod Chopra(2)  Rajeev Narula(2)  rashmig(2)  
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