Investing in mortgages is a great opportunity that is overlooked by many investors.  There are many methods and ways to invest in mortgages.  The following is the skinny on investing in mortgages:

Click here to view the embedded video.

Why Should Someone Consider Investing In A Private Mortgage?

A mortgage is a unique investment that provides the investor with a predetermined return (interest rate), paid out on a monthly basis. Best of all, the investment is secured and backed by real estate.

Why Aren’t Mortgages Readily Available For Investors In Canada?

Most investors seek guidance and advise through financial planners who aren’t licensed to sell mortgage investments.

Where Can Investors Find Mortgages To Invest In?

The best place to find mortgages as investments is through a licensed mortgage broker. Often a mortgage broker will be able to match a borrow with an investor/lender who meets the investor’s risk tolerance.

What Type Of Return Can An Investor Expect To Receive For Their Mortgage Investment?

As with all investments, the returns are relative to the risk associated with the mortgage. An investor can expect a return anywhere between 5-12% depending on the position of the mortgage (1st or 2nd mortgage) and the credit worthiness of the borrower.

If you would like to explore whether mortgage investments are right for you, contact Arnold at 416.461.0204ext1 or email .

The consequences of not paying property taxes are not well appreciated. In my last blog entry I explained the term Judicial Sale and highlighted that this legal process is a great opportunity to acquire undervauled properties in cottage country. More often than not the cause is the non-payment of property taxes.

The other day we received a phone call from a solicitor to help resolve a legal action initiated by a municipality to collect tax arrears. The owner of this very attractive rural property was one week away from being evicted by the sheriff. Specifically, he owed the municipality five years of property taxes plus penalties, interest charges and legal fees.

Burying his head in the sand in ostrich-like fashion he simply ignored the mail, evidenced by a pile of unopened letters. He came dangerously close to loosing his property before we intervened on his behalf with a private mortgage on his otherwise mortgage free property.

This episode illustrates a lot of leniency and patience by municipalities toward property owners before they finally resort to the cumbersome legal process of judicial sale. Keep in mind that properties are an important source of tax revenues necessary to pay for municipal services. When default occurs on an otherwise debt free property, the government turns to the public with the announcement of their intended judicial sale and rewards the highest bidder with conveyance of ownership. The new owner assumes the obligation to pay property taxes and, hopefully, keeps payments up to date.

If you are interested in cottage country properties this may be an opportunity worthwhile exploring. One of our private investors purchased a small island of Georgian Bay in this way.

If your property taxes are currently in arrears and would like to finance them through a private mortgage or you are a private investor who would like to explore these and other opportunities please give me a call to discuss. Arnold Molder 416.461.0204 Dedicated to financial sufficiency.

I’ve recently picked up the classic novel The Foutainhead by Ayn Rand (1943). Reading it this afternoon I came across an unusually insightful quote by one of the lesser characters in the book; Kent Lansing.

“When facing society, the person most concerned, the person who is to do the most and contribute the most, has the least to say. It’s taken for granted that they have no voice and reasons they could offer are rejected in advance as prejudiced – since no speech is ever considered , but only the speaker. It’s so much easier to pass judgment on a person than on an idea. “

The context of the quote was to express how Lansing was going to sell his conservative board of directors on selecting the protagonist of the novel Howard Roark as the architect for their mega Manhattan hotel.  Roark is a very risque, non traditional architect who is a rebel and individualist.

The quote got me thinking on how business decisions are made and specifically decisions to select a mortgage broker over the bank. Could it be that not everyone uses a mortgage broker over their bank because its easier to pass judgment on the individual rather than the idea of the bank as an institution? A good mortgage broker is better educated, has only your interest to serve, is highly specialized in his or her area, can offer better guidance, and the service doesn’t cost a borrower anything and yet approximately only 35% of mortgages in Canada are serviced by brokers.

Highly philosophical question for a mortgage blog! Especially for a Saturday… but feel free to add your 2 cents! If not at the very least add the Fountainhead to your to read list.

This week’s question is in regards to the various post we have online regarding Private Mortgages in Toronto.

What is a private mortgage?

Private mortgages are a special and very interesting type of mortgage option that most people are not too familiar with. The most basic definition of a private mortgage is a mortgage contract in which the lender is not a registered financial institution but may be a friend, family member or individual investor.

Because banks and other financial institutions have strict guidelines for lending that limit their ability to finance certain scenarios and borrower profiles, private mortgages are used to meet those unique needs. Some typical situations where a borrower may need private financing include:

-Financing for a cottage or unique property

-Financing for renovation projects and construction

-Financing for an individual who can’t prove their income by conventional means

-Financing to consolidate debt or recover from a bankruptcy

-Financing for individuals who have income tax or property tax arrears

There are several benefits to the borrower and investor alike in this type of mortgage arrangement.

From the borrowers point of view, private mortgages can be an excellent alternative when a suitable bank mortgage is impossible to obtain. Reasons why a borrower may require a private mortgage include; need for a second mortgage, poor credit, income tax arrears, tax arrears, construction financing, financing on properties that institutional banks may not consider prime, cases where an individual has recently gone bankrupt or just can’t prove their income. A private mortgage should never be a long term strategy for a borrower, as the interest rates tend to be higher and do not always have the features and flexibility that institutional mortgages offer.

Anybody can lend money through a mortgage. You don’t have to be a bank to lend money, it is possible for anyone to offer a private mortgage so long as it is arranged through a licensed mortgage broker in Ontario. Private mortgages are a great investment vehicle which provides monthly income. In addition, mortgages are negotiable instruments which can be assumed, renegotiated, and transferred as needed. All the while the investor is protected by the security of the real estate on which the mortgage is registered.

Regardless of whether you are a borrower or an investor a knowledgeable mortgage broker who is specialized in private mortgages is necessary in order to arrange the mortgage and also provide the guidance needed to make informed decisions. If you would like to connect with a real expert in the area call the father of the S.O.B,  Arnold Molder at 416.461.0204 ext 1. He has been arranging and managing private mortgages for the past 30 years!

DISCLAIMER: please note the purpose of this post is to inform. I am in no way offering investment advise, please consult with your investment adviser.

Meet the father of the S.O.B as he invites those seeking specialized private and second mortgages in Toronto to call him.

Click here to view the embedded video.