Who are CMHC & Genworth? Mortgage Insurers

LeahCoss.ca Hi everyone, how are you? It’s Leah Coss with the Mortgage Center. And I wanted to go over what is the difference between the two mortgage insurers. Now there are three. There’s CMHC which is what people normally use as the go to word. There’s also Genworth as well as AIG. AIG is only used by one lender at the moment. They might make a comeback, but they also might just fall off the board all together. So I’m only going to discuss CMHC and Genworth. Now the primary difference is that CMHC is government run or government overseen, but Genworth is private so that gives them a lot more flexibility. Now how do they differ? Well when it comes to mortgage insurance, if you’re unaware of what this actually does, it doesn’t protect you, it protects the banks. So when you get a mortgage and you’re putting such a small amount of equity down, they’re going to make it so you have to pay these CMHC or Genworth premiums. What these premiums do is if you loose your default and you get foreclosed upon, any losses that you have on this transaction to the bank or any losses that the bank has, they get back from the mortgage insurance. So it’s a good safety net for them. With these, CMHC will give back 100% of the losses, Genworth will do 90%. So every lender uses CMHC, not every lender uses Genworth. Why is it important that we have both out there? Many reasons. But the one that will affect you the most is for example, unauthorized basement suites. If you find a home that has a …