Many of us currently have our funds or savings invested in RSP, RRIF, stock, or bonds, but are not seeing very good returns. Term deposits are even worse for returns. For many that wish for better returns, there are other investment options such as private mortgages.
At Finder Financial, we have the expertise and diligence to place invested funds into mortgages that are secured to real property. Having an investment in a mortgage gives your funds the security of a parcel of real estate. We will look at the real estate market value and available equity, borrower’s income, cash flow and credit in order to provide you with a mortgage that you can evaluate if it will meet your personal goals for growth, security and high returns. The majority of our business is referred to us by other mortgage brokers or real estate agents in BC.
Here are the factors to consider when investing:
- Risk tolerance – You are matched up with mortgages and loans that meet your risk tolerance. All loans are secured against real estate.
- Appraisal – Each property is appraised by certified appraisers.
- LTV – Maximum 75% LTV for residential properties. Other types of properties will be assessed on an individual basis. This means that if the property is worth $200,000, then the maximum loan would be $150,000.
- Length of time – Private mortgages tend to be short in nature, thereby ensuring that your investment is not out there indefinitely. Most private mortgages are only 6 months to 2 years in length, so your funds are not tied up for very long.
- Interest rates – Interest rates charged to borrowers range from 8% to 16% depending on risk, if it’s 1st or 2nd mortgage and the amount of equity the borrower has in the property.
- No 3rd mortgages – we do not participate in 3rd mortgages as risk is too high.
- Diversification – Your investment will be diversified into several smaller mortgages to reduce risk.
- Fees – No additional appraisal, legal or administrative fees to the investor.
We provide you with a comprehensive investment package for your consideration, including:
- Application form
- Credit report
- Appraisal
- Proof of income
- Summary sheet
- Financial statements if applicable
Investing in private mortgages does take time and effort on the investors’ part. We will work closely with you and do most of the work but you are responsible for:
- Evaluating the investment package in detail
- Adhering to our strict privacy guidelines
- Administering parts of the deal post transaction
- Ensuring that you have the sufficient funds to fund deals that you have committed to in a timely manner
- Being available to sign documents
Please give us a call and ask for the Investment Department if you are interested in this opportunity, as this page is just meant to provide you with a summary and general guidelines.
