Uncategorized - Mortgage Brokers, Private Lending Experts in Sherwood Park

Investing in Private Mortgages in Alberta: A Path to Higher Returns

August 4, 2023 (updated August 13, 2023) Published by mike

The investment landscape is ever-evolving, and savvy investors are constantly on the lookout for opportunities that provide a balance between risk and reward. In Alberta’s diverse and robust financial market, one investment avenue that has been gaining attention is private mortgages. This non-traditional investment option provides a unique benefit: the potential for higher returns than traditional investment vehicles. Let’s delve into why this aspect of private mortgage investment is particularly appealing.

Understanding Private Mortgages

A private mortgage is a loan secured by real estate, provided by private investors rather than traditional financial institutions like banks. Private mortgages often fill a void in the market, catering to borrowers who may not meet conventional lending criteria. These can include self-employed individuals, those with unique properties, or borrowers looking to re-establish credit.

The Lure of Higher Returns

The primary attraction of investing in private mortgages lies in the potential for higher returns. Here’s why:

Interest Rates: Private mortgages often carry higher interest rates than traditional mortgages, translating to increased revenue for the investor.
Security: While providing higher returns, private mortgages are secured by real estate, providing a tangible asset that can be leveraged if a borrower defaults.
Customizable Terms: As an investor, you can structure the mortgage terms, aligning them with your investment goals and risk tolerance.
Diversification: Investing in private mortgages allows you to diversify your portfolio, reducing the reliance on traditional stock and bond markets, which can be more volatile.
Local Market Insight: Being an Alberta-based investment, private mortgages provide the advantage of local market knowledge, enhancing your ability to make informed decisions.

The Alberta Advantage

Investing in private mortgages in Alberta comes with additional benefits owing to the province’s economic and real estate landscape. Alberta’s real estate market has shown resilience and opportunities for growth, particularly in key urban centers like Calgary and Edmonton. The province’s economy, driven by the energy sector, agriculture, and technology, also offers a stable backdrop for real estate investment.

Risk Considerations

Like any investment, private mortgages have risks that must be weighed against the potential rewards. Proper due diligence, understanding the borrower’s ability to repay, and thorough property evaluation are crucial to mitigating these risks. Our team of experts can provide the necessary guidance and support.

The Right Approach

If the potential for higher returns intrigues you, investing in private mortgages may align with your financial strategy. Here are some steps to consider:

Research: Understanding the intricacies of private mortgages, market conditions in Alberta, and the legal framework is vital.
Professional Guidance: Collaborate with mortgage brokers, legal experts, or private lending firms specializing in Alberta’s market to ensure compliance with regulations and industry best practices.
Risk Assessment: Assess your risk tolerance and investment objectives to structure private mortgage investments that suit your profile.
Portfolio Integration: Consider how private mortgage investments fit within your overall investment portfolio, balancing them with other assets for diversification and risk management.

Conclusion

Investing in private mortgages in Alberta offers the distinctive benefit of potentially higher returns, an aspect that has made this investment avenue increasingly attractive to individual and institutional investors alike. By understanding the nature of private mortgages, the Alberta market, and by approaching this investment with careful planning and professional guidance, you can tap into an opportunity that may well enhance your investment portfolio’s performance.

Whether you are a seasoned investor looking to diversify or an individual exploring alternative investment avenues, private mortgages in Alberta are worth considering. It’s an investment path that provides both the excitement of exploring new financial frontiers and the satisfaction of potentially higher returns, all anchored in the tangible world of real estate.

When you are ready to learn more, book a time with our head of investor relations, Christine Banks.

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Investing in Private Mortgages with Your RRIF in Canada: A Smart Strategy

July 24, 2023 (updated July 24, 2023) Published by mike

As Canadian retirees seek secure and diverse investment options for their Registered Retirement Income Fund (RRIF), the world of private mortgages has emerged as a promising avenue. Magnum Mortgage is at the forefront of providing valuable insights into this lucrative investment opportunity. In this article, we will delve into what an RRIF is, shed light on the advantages of investing in private mortgages, and highlight how Magnum Mortgage can assist you in making the most of this strategy.

Understanding RRIF (Registered Retirement Income Fund)

A Registered Retirement Income Fund (RRIF) is a tax-deferred retirement savings account designed to provide a steady income stream during retirement. Upon reaching the age of 71 in Canada, individuals who own a Registered Retirement Savings Plan (RRSP) must convert their RRSP into a RRIF or other retirement income options. The government mandates annual minimum withdrawals from the RRIF, ensuring that retirees have a steady income stream throughout their retirement years.

The Appeal of Private Mortgages

Private mortgages present a compelling investment opportunity for RRIF holders due to their potential for attractive returns and risk mitigation. Here are some reasons why investing in private mortgages can be a smart strategy:

Consistent Income Stream: Private mortgages typically offer a higher interest rate than traditional investment options like bonds or GICs, providing a steady income stream that aligns with the RRIF’s purpose.
Asset-Backed Security: Private mortgages are secured by real estate, reducing the risk of default compared to other investment options, thereby enhancing the overall security of your RRIF portfolio.
Diversification: Diversifying your RRIF portfolio with private mortgages can reduce vulnerability to fluctuations in the stock market and provide a more stable financial foundation.
Control over Investment: As a RRIF holder investing in private mortgages, you have the opportunity to directly assess potential borrowers and properties, giving you a greater sense of control over your investment choices.
Potential for Higher Returns: Private mortgages may offer higher returns than conventional fixed-income investments, making them an attractive option for investors seeking to maximize their retirement income.

Magnum Mortgage: Your Trusted Partner in Private Mortgage Investment

When considering private mortgages as an investment strategy for your RRIF, partnering with a reputable and experienced mortgage brokerage is essential. Magnum Mortgage is a leading name in the industry, offering expert guidance and access to a diverse range of private mortgage investment opportunities.

Our team at Magnum Mortgage works closely with RRIF holders to understand their financial goals and risk tolerance. We provide personalized advice to help you build a well-balanced RRIF portfolio that includes private mortgages with promising returns.

Take control of your retirement income with Magnum Mortgage today! Speak with Christine Banks, our seasoned mortgage investment expert, to explore the rewarding world of private mortgage investment within your RRIF. Book a time with Christine using the link below now and secure your financial future with confidence.

Book with Christine

Investing in private mortgages with your RRIF can be a prudent strategy for Canadian retirees seeking stable income and robust returns. Magnum Mortgage offers a wealth of knowledge and experience to guide you through this exciting investment avenue. Don’t miss out on this opportunity; contact Christine today and embark on a journey toward a financially secure retirement.

Understanding the Impact of Bank of Canada Prime Rate Changes on Private Mortgage Investors

June 25, 2023 Published by mike

As an investor, it’s crucial to stay informed about factors that can influence your investment portfolio. One significant aspect that can impact the world of private mortgages is the Bank of Canada’s prime rate.

The Bank of Canada Prime Rate and its Influence:

The Bank of Canada Prime Rate is the interest rate set by the central bank and serves as a benchmark for lending rates across financial institutions. This rate affects the borrowing costs for consumers and businesses, influencing the overall economic climate. This rate is set 8 times per year on a set schedule. You can see the current dates here https://www.bankofcanada.ca/2022/07/2023-schedule-interest-rate-announcements/

While private mortgage investments with Magnum are not directly tied to the Bank of Canada Prime Rate, changes in this benchmark rate can indirectly affect private mortgage investors in the following ways:

Mortgage Rates and Yield Potential:

When the Bank of Canada raises the prime rate, it often increases borrowing costs for traditional mortgage borrowers. As a result, some potential borrowers may turn to alternative financing options, such as private mortgages offered by Magnum Mortgage. This increased demand can drive higher private mortgage interest rates, potentially boosting investors’ yield potential. As competition for investor funds increases and rates increase on deposits and GIC’s the yield on private mortgage investments must also increase.

Investment Strategy Considerations:

Private mortgage investors need to understand that the Bank of Canada’s prime rate changes are just one aspect to consider when formulating an investment strategy. While changes in the prime rate can indirectly influence private mortgage investments, it is important to assess various factors such as market conditions, risk appetite, and individual investment goals.

Diversification Benefits:

Private mortgage investments with Magnum Mortgage allow investors to diversify their portfolios and reduce exposure to traditional financial markets. This diversification helps investors mitigate risks associated with fluctuations in interest rates and other economic variables, such as the Bank of Canada Prime Rate. By spreading investments across various private mortgages, investors can potentially minimize the impact of rate changes on their overall returns.

The Bank of Canada’s prime rate significantly shapes the lending landscape and has implications for investors in Magnum Mortgage’s private mortgages. While changes in the prime rate can indirectly affect private mortgage investors, it is crucial to maintain a broader perspective and consider a range of factors when making investment decisions.

Magnum Mortgage provides investors with carefully vetted private mortgage opportunities that aim to deliver consistent returns. By understanding the dynamics of the market, interest rate fluctuations, and other influential factors, investors can make informed decisions and take advantage of the unique benefits offered by private mortgage investments.

To learn more about investment opportunities and the impacts of market fluctuations, please reach out to our Investor Relations Specialist, Christine at .

Disclaimer: The information provided in this article is for educational purposes only and does not constitute investment advice. Magnum Mortgage does not guarantee specific returns or outcomes from private mortgage investments.

Frequently Asked Questions About Mortgage Investment

April 19, 2023 (updated May 15, 2023) Published by mike

It’s recommended that every investor, big or small, diversify their investment portfolio to help mitigate their risk. An option available to help diversify an investment portfolio could include investing a portion of one’s investments into private real estate, which is possible with mortgage investments. When paired with traditional investments like stocks and bonds, mortgage investing provides stable returns and lower fees, while mitigating investment risk.

That said, when it comes to mortgage investing, there are many questions investors may have but often find answers difficult to come by. Magnum Mortgage Corp wants to arm you with the most accurate information available to help you choose wisely, and to do this, we’ve answered some of the most frequently asked questions about mortgage investment.

1. Can I use my Registered Retirement Savings Plan (RRSP) to fund mortgages?
Yes! Suppose your needs include redirecting your volatile retirement savings to a steady investment. In that case, you should consider a self-directed mortgage investment with Magnum Mortgage Corp. Depending on the amount of risk you desire and the funds you have available in your RRSP, RRIF, TFSA, LIRA, or LIF; we will be able to find you a mortgage that meets your comfort level.

2. What is the rate of return associated with this type of investment?
Mortgage investments can pay anywhere from 6% to 12%. Your rate of return will be determined on a deal-by-deal basis. We will let you know when we have an investment opportunity for you, and we will discuss the intricacies of the file in depth. The more risk associated with the file, the higher the interest rate we can charge the borrower and, therefore, the more money you will make from the investment. In saying that, the more equity available in the home, the lower the interest rate we must charge to stay competitive and satisfy the borrower to complete the financing through us and, therefore, the lower the rate of return of your investment. This provides a perfect risk vs. reward balance.

3. What is the process of investing with you?
To start, we will fill out the appropriate forms to get you set up with a self-directed investment account. When a mortgage opportunity that fits your criteria becomes available, we will contact you and review the loan details to obtain your consent and approval. If the mortgage is one you would feel comfortable investing in, you will sign the appropriate forms, allowing you to proceed with the investment opportunity. When the loan is ready to fund, the necessary steps are completed to advance the funds from your Self-Directed investment account. You will then receive monthly interest payments into your RRSP if the borrower makes their payments and is in good standing. The remaining principal is transferred back into your RRSP when the mortgage pays out, ready to fund another mortgage. You keep the accumulated interest you have been receiving monthly along the way.

4. How long are the mortgage investments for?
Our mortgage investments are for a one-year term with the ability for you, as the investor, to offer a renewal at your discretion if you allow the borrower another term. This is usually determined by the borrower’s previous year’s payment history.

5. Is this investment only available through Registered Retirement Savings Plan (RRSP) fund?
Mortgage investments can also be made through cash investments. If you are a qualified investor, you will fund the mortgage via cheque or deposit to the lawyer’s bank account, which would hold your funds in trust and prepare the mortgage in your name. In addition to RRSP funds & cash, you can also invest your Registered Retirement Income Fund (RRIF), your Locked-In Retirement Account (LIRA), your Life Income Funds (LIF) or funds in your Tax-Free Savings Account (TFSA). As stated previously, we would still administer these files on your behalf, and the payment would be deposited into your appropriate investment/deposit account monthly.

6. What are the minimum investment amounts?
For a second mortgage, the minimum investment amount is $50,000.00 to around $150,000.00. For a first mortgage, the minimum investment amount typically starts around $200,000.00 up to approximately $500,000.00. There is no maximum for either mortgage. It is up to the investor’s comfort level and what type of mortgage they decide they want. Every mortgage is different, so it is best to be viewed on a case-by-case basis.

7. What sort of risks are involved?
As with any investment with a significant rate of return, there is risk involved. When it comes to mortgages, our underwriters must look at a plethora of details to qualify the applicant. We look at the loan-to-value (the amount of equity left in the home after we fund the transaction); the person’s past credit history through their credit bureaus; their income through their paystubs, letter of employment or bank statements; as well as the logic behind the request for funds. We want to make sure the mortgage brokers or Borrowers that come to us have a clear exit strategy in one to two years to get the borrower back on their feet & qualified with a traditional mortgage by the end of their term. In order to further mitigate risk for our Lenders, appraisals are collected on every file to provide us with the property’s current market value, along with pictures of its condition.

8. How do I get started?
Feel free to give us a call today to set up an appointment to discuss the opportunity of becoming a mortgage investor, how it works, the risks involved, and any other questions you may have.

If you have any additional questions about investing in mortgages, get in touch with the experts at Magnum Mortgage Corp. As a mortgage broker and private lending firm in Sherwood Park, Alberta, Whether you are a borrower looking for a mortgage, an investor looking to invest in a mortgage, or a broker looking for funding opportunities, we have the options available for you. We have been fully licensed under the Real Estate Council of Alberta (RECA) since 2003, bringing value, expertise, and integrity to private lending for over eighteen years.

To learn more about how we can help you, please click here or contact us by clicking here.

Can I use my Registered Retirement Savings Plan (RRSP) to fund mortgages?

Yes! Suppose your needs include redirecting your volatile retirement savings to a steady investment. In that case, you should consider a self-directed mortgage investment with Magnum Mortgage Corp. Depending on the amount of risk you desire and the funds you have available in your RRSP, RRIF, TFSA, LIRA, or LIF; we will be able to find you a mortgage that meets your comfort level.

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Debt Consolidation

January 27, 2023 (updated January 27, 2023) Published by mike

Debt consolidation is a financial strategy combining multiple outstanding debts into a single, manageable loan. This can be done by taking out a personal loan, using a balance transfer credit card, or working with a debt consolidation company. Debt consolidation aims to simplify the debt repayment process and save money on interest charges.

One of the main benefits of debt consolidation is that it can help individuals manage their debt more effectively. When you have multiple debts with different interest rates and minimum payment requirements, it can be not easy to keep track of everything and prioritize payments. By consolidating your debts into a single loan, you have a clear and concise view of your debt and can create a plan to pay it off.

Another benefit of debt consolidation is the potential to save money on interest charges. When you have multiple debts, each likely has a different interest rate. Over time, you can save money on interest charges by consolidating all of your debts into a single loan with a lower interest rate. This can help you pay off your debt faster and ultimately save you money in the long run.

Debt consolidation can also help improve your credit score. When you have multiple debts, keeping up with the minimum payments and avoiding late fees can be challenging. This can lead to missed payments and late fees, hurting your credit score. By consolidating your debts into a single loan and making payments on time, you can improve your credit score and increase your chances of getting approved for loans in the future.

Additionally, debt consolidation can provide peace of mind. It can be overwhelming and stressful when you’re struggling with multiple debts. Consolidating your debts can give you a sense of relief and help you feel more in control of your finances. This can help you focus on other essential aspects of your life, such as your career or relationships.

In conclusion, debt consolidation can be a great financial strategy for individuals struggling with multiple debts. It can help you manage your debt more effectively, save money on interest charges, improve your credit score, and provide peace of mind. However, suppose you’re considering debt consolidation. In that case, call us and see if we can help you.

When is a private mortgage right for me?

October 27, 2021 (updated January 27, 2023) Published by mike

A Private Mortgage is typically a short-term loan, usually ranging between one to three years, that is securitized by a Residential or Commercial property (or sometimes even blanketed across more than one property).

Private lenders are often able to provide alternative solutions to traditional Bank or Monoline lenders, who can sometimes be more restrictive or conservative in their lending guidelines.

The overall marketability and value of a home, which will securitize the loan for the Lender, is key on a Private Mortgage application, as opposed to a client’s credit history. At Magnum Mortgage Corp, we want to provide a lending solution to homeowners where a Traditional Bank or Monoline lender cannot help with a solution (on bank declines or bank turndowns).

Private Mortgages can provide a solution for clients in a number of different challenging situations.

Here are a few instances where a Private Mortgage may be an option for you to consider!

– Clients who require a refinance for quick access to their home equity, where a traditional lender may not be able to accommodate the timeline;

– Clients facing CRA garnishment (from tax arrears), or owe money to the CRA that need to be paid by with Equity in their home;

– Clients requiring consumer proposal payouts;

– Clients who need debt consolidation or home renovations (for home flips);

– Clients who require quick bridge financing or interim financing because their current Lender does not offer Bridge Financing or Interim Financing;

– When completing Estate buyouts to payout other parties, or to access equity to settle the Estate Expenses;

– Clients requiring top-ups on their CHIP Reverse Mortgages

Benefits of a Private Mortgage

1) Great for clients who have great credit, but down quite draw enough income from their businesses to qualify traditionally on a mortgage application with a traditional bank lender.

2) Clients who need access to quick financing (as traditional financing often takes a long processing time).

3) Can provide an option for clients who have bad credit and have been turned down by the Bank or a Mortgage Lender, but have ample equity in their home or ample savings that will be going towards their down payment on their home purchase.

4) Great for clients who would like to finance a mortgage under their Company name or Holding company name, instead of financing under their personal name.

5) Great for clients who would like to retain their great rate on their first mortgages, and are considering a private 2nd mortgage to draw out equity in their homes. Especially in a market, where rates are steadily increasing, often the blended rate between a Prime First Mortgage, & a Private Second Mortgage works out to be a more cost effective option to explore for the homeowner.

Common problems you might face
Sometimes clients exploring Private Mortgages may not have thought of an exit strategy upfront. As Private Mortgages can be quite costly, it’s great to think of this product as a short-term solution. If you align yourself with a knowledgeable Mortgage Broker or Mortgage Professional upfront (i.e., us!), we can help you discuss your strategy!

Questions to ask your mortgage professional

What does the application process look like?
What are the rates and fees I should expect on a private loan?
Are there any documents that I should prepare or collect?
What does it look like after my Private Mortgage funds? Who do I contact if I have questions after?
What does my exit look like? Where do we go after the 1 – 3 year term comes up for renewal with my Private Mortgage?

Costs involved
Interest rates can range anywhere from 7.95% – 16% and Lender fees generally range between 1.5 – 6% depending on whether a borrower requires a first mortgage, a second mortgage, or interim financing/bridge financing. There are usually legal fees and appraisal costs involved as well.

Considerations
First determine if you have enough equity in your home to consider a Private Mortgage option – don’t know how? Click here

If you have more than 20% equity in your home, a Private Mortgage may be an option for you!

Your next step would be to fill out an application by clicking here and submit your documents to get started. Our knowledgeable Mortgage Professionals / Mortgage Brokers at Magnum Mortgage Corp. can also find an alternative product / service if there’s a better fit.

If you are looking for mortgage lenders in Sherwood Park, Alberta, reach out to us at Magnum Mortgage Corp. We have been lending to great Alberta borrowers for eighteen years and are fully committed to supporting Albertans through all the ups and downs of their financing needs. Whether you are looking to purchase a lake lot to build your dream cabin or your financing situation just doesn’t fit the exact mold the bank needs you to fit into, we can help.

We offer services like new purchase mortgage, equity take out mortgage, mortgage foreclosure, debt consolidation mortgage, renovation mortgage, construction mortgage, interim financing, new to Canada mortgage, revenue property mortgage, private mortgage, bad credit loans, CRA garnishment, alternate mortgage financing, non-traditional lending, and home equity loans.

We serve clients across Sherwood Park, Strathcona County, Sturgeon County, Parkland County, Leduc County, Edmonton, St. Albert, Spruce Grove, Fort Saskatchewan, Red Deer, Beaumont, Camrose, and the surrounding areas.

Get in touch with us today!
To learn more about the services we offer, please click here. If you have a unique scenario that you’d like to run by us, please contact us by clicking here or calling us at (780) 467-6393.

Category: Uncategorized