CEO, Ameera Ameerullah of Canada Mortgage & Financial Group (CMFG), said investing in private mortgages is a great alternative for investors to earn a greater return than what the bank offers on their capital.
Structuring mortgage investments can become messy if you are working with an inexperienced, non-compliant team. The team of CMFG is known for its diligence, efficiency and ethics which drives with Ameerullah's core values.
CMFG do not syndicate several investors’ capital into one transaction unless the relationship is of immediate family member (spouse, children, parents). Primarily each investment is a stand-alone transaction.
Why investors choose to invest in private mortgages with CMFG?
To date, CMFG has maintained a zero default mortgage portfolio which is a unique badge of honour for the company. Bank investments are typically unsecured where returns may fluctuate which could affect the investors return or principal investment amount. Private mortgage investments provide investors a stabilized annual rate of return while filling the gap for borrowers who do not meet the traditional banking guidelines. Investors have several option of capital redemption since the investment is secured on real estate whereas if there’s a decline in return from the banks, the investor have no alternative option but sustain a loss.
What is a private mortgage?
A private mortgage is a non-traditional loan offered to borrowers requiring emergency capital as a short term loan secured against real estate. It is typically interest only payments for the term.
Why borrowers seek private mortgages?
Clients typically don't want to break their first mortgage for a variety of reasons. This could include lower rates on the current first mortgage, high penalties for breaking the existing mortgage term prior to the date of maturity, or borrowers who do not meet the traditional banking guidelines.
Use of capital: typically for the purpose of renovation, consolidating existing high interest debts, payout higher interest mortgages, business capital injection, emergency life events, payout an existing partner, purchasing of a property or to cover unexpected shortfall of closing costs.
What type of funds can an investor use for mortgage investments?
Investors can utilize their registered funds such as RRSP, TFSA, RIF and LIRA accounts or non registered funds such as cash savings to invest in private mortgages.
"Every investment carry risks, but how you mitigate such risk and plan for exit is important to know prior to investing in mortgages"
To learn more about CMFG due diligence process, suitability requirement, investing and exit strategies, contact AMEERA@CMFG.CA or call 6474949885 ext 107.
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