SmartHomeOwners

Homeowners are in better shape than non-homeowners when it comes to financial fitness, according to a new survey of Canadians conducted by Genworth Financial Canada and the Canadian Association of Credit Counselling Services.

While most respondents (55%) say they are in good financial shape – up from 50% in 2007 – those who own homes score higher than those who don’t on two important measures of healthy household finances:

• Debt repayment. A full 65% of homeowners pay off their credit card balances each month, compared with 48% of non-homeowners.
• Ability to save. Some 44% of homeowners were able to pay all their bills and save some money in the past year, compared with 31% of non-homeowners.

Nearly one in four homeowners (23%) who have mortgages have also made a lump-sum payment or accelerated their mortgage payments in the past year, according to the survey. Women led the way, with 26% of them putting extra money toward their mortgage, compared with 21% of men.

“Homeownership helps people focus on their financial situation and get their fiscal house in order,” says Peter Vukanovich, President and Chief Operating Officer of Genworth Financial Canada.

Still room for improvement

The survey findings also suggest several areas for improvement – and potential opportunities for you to help clients take steps to manage their mortgage and improve their financial health.

“A mortgage is easier to manage when people have good personal finance skills,” says Henrietta Ross, Chief Executive Officer of the Canadian Association of Credit Counselling Services. Yet, in the Financial Fitness survey, only 11% of Canadians agree they are in “great” financial shape, on their way to achieving their financial goals, and 45% say they are not satisfied with their financial progress.

Be a fitness coach to your customers

As a lender, there are a number of exercises you could suggest that could encourage existing customers or prospective first-time home buyers to improve their financial fitness. They could:

• Take advantage of opportunities to make a lump-sum payment or accelerate their mortgage payments.
• Arrange for pre-approval. Just one in four first-time buyers sought pre-approval in the past year.
• Check their credit rating. Just one in seven Canadians asked for and received their credit report in the past year.

Most important of all, encourage your customers to talk to their financial planner about saving and investing. Just three in 10 Canadians have done this, and consulting a professional advisor may help your customers discover they have more money available to save than they thought.

Build customers’ confidence

By sharing your expertise, along with strategies that can be implemented right away, you can enhance your customers’ confidence as well as their financial fitness. Homeownership builds financial security, with a goal to work toward: Remind your customers that 65% of the homeowners surveyed who had completely paid off their mortgage said they are in good financial shape. That’s a full 10% higher than the overall Canadian population.

Read more about the Financial Fitness survey here.

Source: Genworth Financial, Canada.