What is Mortgage Investing?

What is Mortgage Investing?

Mortgage investing in the context of a Mortgage Investment Corporation (MIC) such as M12 Capital MIC refers to investing in a specific type of investment vehicle that focuses on mortgage loans. A MIC is a Canadian investment company that pools funds from individual investors and uses them to invest in mortgages or mortgage-backed securities.

Here's how mortgage investing works with M12 Capital:

  1. Understanding a MIC: A Mortgage Investment Corporation is a type of mortgage fund that operates similarly to a real estate investment trust (REIT). It is typically managed by a team of professionals who assess and select mortgage investments on behalf of the investors.

  2. Investing in a MIC: To invest in a MIC, you typically need to purchase shares or units of the corporation. These shares represent your ownership in the MIC and entitle you to a share of the income generated from the mortgage investments.

  3. Mortgage portfolio: The MIC uses the pooled funds to invest in various mortgages or mortgage-backed securities. The mortgage loans can be diversified across different borrowers, properties, and geographic regions to manage risk. The MIC may also hold a mix of residential and commercial mortgages.

  4. Income distribution: The income generated from the mortgage investments, including principal and interest payments, is distributed among the MIC shareholders. The distribution may take the form of regular dividends or interest payments, depending on the structure of the MIC.

  5. Risks and considerations: Mortgage investing through a MIC carries certain risks. These may include the potential for default by borrowers, changes in interest rates affecting the value of mortgage-backed securities, fluctuations in the real estate market, and liquidity risks associated with the ability to sell MIC shares.

Call M12 Capital today for more information.