What is a Mortgage?
A mortgage is simply a debt instrument secured by a registered charge on real estate. It is a promise to pay by the borrower (mortgagor) to the lender (mortgagee) a certain amount of money on stipulated terms and conditions. A mortgage is registered in the Land Titles Office and cannot be removed other than with the consent of the lender or by a court order.

Rate of Return
Investments in private mortgages can consistently earn between 8.75% and 17% depending on the degree if risk, with an estimated average return of 11% per annum. If you re-invest the interest received at the same rate, you should double your initial investment every seven years.

This rate of return compares very favourably to other forms of investments. Compare these returns with the 1 year and 5 year average returns as follows:

	1 Year	5 Year
183 day Canada T-Bill	2.7%	4.5%
Average 1 year GIC’s	1.6%	3.4%
Average 5 year GIC’s	3.9%	4.6%
TSE 300 index	(14.1%)	( 0.8%)
Dow Jones Industrial Average	(14.2%)	4.1%
Mortgages	8.75%	10.0%

Security
Unlike investments in stocks or bonds, mortgage investments are secured by tangible assets that you can “touch and feel”. Typical mortgages are based on a percentage of the appraised value of the real estate security or the Loan to Value Ratio (LVR). By combining this with short mortgage terms (the length of time of the loan is outstanding) the likelihood of the value of the real estate dropping below the value of the mortgage is considered minimal.

As an example, if you were to invest $100,000 in a mortgage today, with real estate security worth $133,000. In two years time, when the mortgage matures and is repaid, the value of the real estate could drop 25% and your initial investment should still be protected. Compare that security to a $100,000 investment in a mutual fund whose value drops 25% to $75,000 after you purchase it!

Low Volatility
Mortgage investments have a stated interest rate for the length of the loan that typically is constant. You know what you will earn on your investment when you make it, much like a GIC but at higher rates.

Diversification
Part of every good investment strategy should include different types of investments to reduce your exposure to the volatility associated with individual market segments, and accordingly protect your assets. Mortgages give you a passive way to invest in real estate while minimizing risk and preserving capital.

Periodic Income
Once the borrower receives the mortgage funds, he is required to make regular periodic payments of interest and in some cases part of the original loan. This can provide the investor with regular periodic cash flow.

How Do I Invest In Mortgages?

Directly
Michlan Mortgages will find, qualify, and negotiate a loan on your behalf directly with a borrower. We take care of all the work for you.

Through Your RRSP’s and RRIF’s
Funds invested in individual RRSP and RRIF plans qualify for arm’s length mortgages on real estate situated in Canada. (with certain limitations). The mortgage funds must first be held as a Self-directed Plan by a Trustee that will accept mortgage investments

What Does Michlan Mortgages do as a Mortgage Broker?

Michlan Mortgages is an agent for lenders in much the same way a real estate agent is an agent for the seller of real estate. We are trained professionals that have met a satisfactory educational requirement in order to be registered by our Provincial Association. This registration requirement ensures we provide a duty of care, a knowledge of mortgage products and a standard of service to meet individual needs. Our wealth of lending experience allows us to review and qualify a property for lending quickly.

Michlan Mortgages role is to find and structure deals that are suitable for mortgage financing. Once the deal is pre-approved by us, we package the deal for presentation to the investing public. For this service we are paid a fee by the person borrowing the funds, not by the investor.

Why use Michlan Mortgages?

We are committed to product excellence, investment security & service. We draw on years of experience in the financial industry, to serve your mortgage investment needs. All investment projects are put through an underwriting process prior to being presented to you, the investor. Preservation of your capital is first and foremost in every mortgage opportunity we review. Our commitment to excellence includes the following criteria:

» Quality Real Estate Collateral

» Additional collateral required when appropriate

» Above average return

» Short term (12-24 months) to minimize risk

» Pre planned exit strategies

» Full team of legal and appraisal advisors

» All mortgage investments are arm’s length


For further information email or call!