Investing in Private Mortgages

  • The most secure and durable investments are in real estate property. History has proven that although real estate prices may fluctuate from time to time, over the long-term, real estate property has appreciated in value. The security for a mortgage is the property itself. Private mortgages provide a regular income stream, tangible security and a better return on investment than bank deposits, GICs or bonds.

    From a financial planning perspective, a mortgage interest payment is a fixed income payment where the lender has control over choosing the property and the borrower. Investing in mortgages is often less risky than investing in mutual funds and stocks because the lender is secured by both the borrower and the property. The lender also has the freedom to negotiate the interest rates and terms with the borrower. Investing in real estate without becoming the landlord saves the hassle of dealing with tenants and everything else associated with ownership of revenue properties. The investor earns a passive income that can even be tax sheltered if it is funded from their RRSP Plan. Visit MyRRSP.com to find out more.

Benefits of Investing in Private Mortgages

  • No Cost to You

    The borrower is required to pay the costs associated with registering the mortgage against the title to their property. The investor collects a monthly payment for the term of the mortgage, without incurring any further cost.

    Monthly Income

    The mortgage will generate cash each month that is paid to you directly by post-dated cheques.

    Protected Capital

    The main reason that investors love mortgages is because of the low risk associated with them, as they are secured by both the borrower and the property.

How to Invest in Mortgages

  • Begin by contacting your mortgage broker to get a clear picture of the investment opportunity so that you can decide if investing in mortgages is right for you.

    The next step is to determine how you are going to fund the request. Besides cash, mortgages can be funded by an RRSP, RRIF, or a LIRA. You will then go to a Canadian Trust company and open a self-administered RRSP account and transfer your funds.

    Contact MortgagePRO Ltd. to find mortgage investment opportunities and advice from a licensed mortgage broker that can help you determine the type of mortgage that you want to fund, and to negotiate terms, conditions and the interest rate. Once you have made a decision to fund, all documents are sent to the conveyancing lawyer to complete and sign the mortgage commitment. The lawyer will also register the mortgage and your interest on title. You will also be asked to complete and sign a Mortgage Package for your RRSP Plan holder. The last step is to set up an automatic payment system with the borrower or collect postdated cheques. Once in place, the monthly profit you make will be deposited into your RRSP account tax free.

    For more information visit MyRRSP.com or contact MortgagePRO Ltd. at 403-253-2022.

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Investing in Mortgages: Easy-to-Understand Process (video)