Why Invest in a Mortgage Investment Fund?
Mortgage Investment Corporations (MICs) were created by the Government of Canada in 1973 to promote private financing and to make it easier to invest in mortgages. MICs are governed by the Income Tax Act, section 13.1.
Mortgage Investment Funds represent a very attractive investment vehicle for those investors who wish to reap the benefits of private mortgage investing, but who may lack the expertise, time or investment capital required to invest by way of holding individual mortgages directly. By pooling funds, investors can participate in the specialized mortgage investment market with the guidance of an experienced management team which oversees the complex sourcing and administration of the mortgage portfolio.
A MIC provides a convenient and effortless investment vehicle as the experienced MIC managers are responsible for sourcing the mortgages, making careful lending decisions, and negotiating the most favourable interest rates and terms possible.
MIC managers work with borrowers, lawyers, notaries and other advisors to administer the mortgage portfolio. Additionally, the assets of the MIC may be leveraged by the MIC manager by prudent lending from banks or credit unions.