Financial Literacy 20, 30

(a)	Explain what a mortgage is and its main purpose.
(b)	Differentiate between mortgage and non-mortgage debt.
(c)	Define and use appropriate terminology related to mortgages such as: mortgagor; mortgagee; amortization; minimum payment amount; annual percentage rate (APR); earnest money; equity; escrow; pre-approval; principal; closing costs; closed vs. open terms; and fixed vs. variable rates.
(d)	Identify terms in a mortgage contract such as the APR, prepayment penalty, appraisal fee, closing costs, prepayment privileges and portability.
(e)	Examine consumer and lender rights and responsibilities related to mortgages.
(f)	Examine how gross debt service ratio (GDSR) impacts one’s ability to obtain a mortgage.
(g)	Explain the role of the Canada Mortgage and Housing Corporation (CMHC) in helping Canadians purchase a home.
(h)	Explain the purpose of mortgage default insurance and determine current CMHC requirements for it.
(i)	Research the availability of and requirements for mortgage default insurance offered by other Canadian companies such as Genworth Financial or Canada Guaranty.
(j)	Discuss the advantages and disadvantages of mortgage life insurance which a mortgagor may also consider purchasing.
(k)	Research various ways of obtaining a mortgage (e.g., through a bank, credit union or mortgage broker).
(l)	Compare interest rates associated with different types of mortgages available through various lenders.
(m)	Research the circumstances under which paying a mortgage prepayment penalty may be advisable.
(n)	Research how to obtain mortgage financing by using the equity in one’s home (e.g., 2nd mortgage, Home Equity Line of Credit (HELOC)) or the Registered Retirement Savings Plan Home Buyers’ Plan.
(o)	Debate the advantages and disadvantages of consolidating other debt such as money for renovations or new furniture, or closing/appraisal fees, into a mortgage loan.
(p)	Discuss steps that can be taken to plan for unforeseen events such as rising interest rates, job loss, death of a partner or economic recession that may affect one’s ability to make mortgage payments.

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