Mortgages provide high and stable returns, relatively low risk (by real property collaterals and individual guarantees of borrowers) and regular income with fixed interest rates.
The legal obligations of the borrower and the legal remedies of the lender are in accordance with the law. As a result, mortgages have been one investment option for which relatively sophisticated, affluent investors can apply . These investors typically provide funds for 100% of personal mortgages and hold mortgages directly.
What is a MIC
The existence of a MIC is to fill the shortcomings of large financial institutions’ mortgage business. According to the law, MIC is mainly engaged in mortgage business and investors purchase investments in the form of shares to fund the mortgages of property buyers that could not qualify for a mortgage with a larger financial institution, and they can get dividend income of higher returns. The MIC mortgage rate is higher than the banks’ mortgage rate, and the interest rate on the loan is fixed and secured by the mortgage, so the dividend income of the investor is higher and more stable than the returns on other investment products.
How does MIC work?
So far, investors buy a preferred share in Canwealth MIC for $ 1.00 per share. According to the revenue of the selected mortgage investment portfolio, we pay our investors on a quarterly basis based on the mortgage interest income. Received dividend income can be withdrawn in cash or can be reinvested to achieve a higher compound interest. MIC’s investment for one year, and after one year investors can choose to divest or can continue to reinvest principal and dividends in order to obtain a higher rate of return.
How does Canwealth use money from investors?
The shares you purchase in a MIC are actually part of a diversified mortgage investment portfolio . Canwealth provide money for individuals, builders and developers（borrowers） to short-term mortgage loans and temporary loans which are located in the Greater Victoria, Vancouver Island, Greater Vancouver and other major areas in BC province.
What kind of projects will we invest in?
The vast majority is residential loans, and some are contruction and commercial loans.
How are dividends paid out?
Canbank MIC pays out dividends quarterly and send quarterly statements to our investors with account details as well as a summary of the overall MIC portfolio. We provide our investors the option of transferring all dividends to their bank account or re-invest for continuous growth.
Can I reinvest my distributions rather than receive them in cash?
Yes. A dividend reinvestment plan (DRIP) is available to those who wish to purchase additional units instead of receiving a cash payment. This arrangement is most suitable for investors who are looking for the total growth of a portfolio rather than the income it generates.
Are there any costs associated with investing in the mic?
No broker or referral fees are charged and 100% of your investment goes directly to the Canwealth MIC .
Are the quarterly distributions taxable?
All MIC income is taxed just like interest income. Canadian Residents will receive T5 slips the same way they receive interest income from banks. Chinese residents can also invest and will receive NR4 form as a non-resident.
Can non-resident or Chinese residents or company invest in Canwealth MIC?
According to the Canadian Income Tax Act, non-residents or corporations including Chinese residents or corporations are permitted to invest. For non-residents, we will withhold 10% tax on our dividends payout to the CRA (Canadian Revenue Agency) and send out NR4 slips for tax purpose every year. Moreover, if non-resident, individuals or companies do not have other incomes in Canada, it is not mandatory for them to file income tax return in Canada.
Can Canwealth MIC go bankrupt and lose all clients’ money?
Very unlikely because every dollar is secured by real estate properties. We lend out a maximum 75% of the appraised value, and all our mortgages are in one year term or shorter. We will also monitor closely every borrower and its real estate. If the borrower should default on their mortgage, we will foreclose on the property and sell it to pay back our mortgage. Our mortgage contract will also stipulate that the borrower should be personally liable for this loan. It is also highly unlikely that the real estate value will drop by more than 25%-30% in less than one year.
In view of the dollar amount involved, large amounts of capital are required for even some small portfolios of mortgage. Individual direct mortgage investors are fully responsible for all aspects of the underwriting process, including reviewing the real estate provided as a guarantee, carefully checking mortgage applications (including the borrower’s credit history, verifying the borrower’s income and employment), and assessing its overall financial ability. Once a loan decision is made, the individual investors must then negotiate the interest rate and other terms and conditions applicable to the mortgages and instruct the lawyer to act accordingly. Subsequently, individual investors are responsible for collecting payments and dealing with any arrears or defaults that may arise.
Mortgage Investment Corporations (MICs) are very attractive investment tools for investors who want to get a mortgage interest but may lack the necessary expertise, time and energy, or investment capital required, to invest by way of holding individual mortgages directly.
The diversification afforded by investing in professionally managed MICs (such as Canwealth) can significantly reduce risk.
The MIC also provides a convenient and effortless investment tool that is fully responsible for managing all aspects of the company’s business; from mortgage resources to lending decisions, negotiating the most favorable interest rates and terms and conditions of guidance, communicating with lawyers and managing a mortgage portfolio. Even if the small new investment funds may be invested on an on an on-going basis so you can make sure 100% of investment capital is always able to get attractive returns.
Potential investors can contact Canwealth (Tel: 778 751 8888 ex. 102) for more information, including a comprehensive investor information package.
Please fill in the form below to obtain the investor package.