To deal with the potential housing crisis, the Canadian government took proactive steps decades ago to promote private lending and democratize residential and real estate investments. This initiative resulted in the formulation of Mortgage Investment Corporations (MICs), that are still playing a significant role in providing residential mortgage financing to potential home buyers having a bad credit or refused by a bank or lender.
MICs Provide Solutions for Housing Challenges
In response to growing concerns about housing supply and affordability, the Canadian government began on a bold strategy to address these pressing issues. This strategy is a component of the Residential Mortgage Financing Act. It includes the formation of MICs, which are special groups that make it easier for private enterprises to lend money to homeowners. It is a wise decision since it allows more people, particularly those without a lot of money, to participate in real estate.
What Is A Mortgage Investment Corporation (MIC)?
A Mortgage Investment Corporation, or MIC, is a unique organization in Canada that lends money for mortgages. It operates in the real estate sector and handles a collection of mortgages that are protected by property, such as houses or business premises. The property type is determined by the MIC’s focus. People who want to invest their money can buy shares in a MIC, which pay out on a regular basis—ranging from monthly to quarterly or yearly.
MICs Are A Bit Similar To REITs
Similar to Real Estate Investment Trusts (REITs), MICs provide investors with access to the real estate market without the need for physical property ownership. However, the key distinction is in their investment portfolios. REITs primarily hold tangible real estate assets, whereas MICs engage in mortgages. This strategic divergence opens up a new path for investors looking to participate in real estate dynamics via a distinct investing framework.
Mortgage Investment Corporations, or MICs, operate under the same rules as private lending companies. They adhere to both the federal Income Tax Act and the provincial requirements for purchasing and selling shares. These rigorous requirements ensure that MICs operate in a transparent, accountable, and law-abiding manner.
In Ontario, MICs are required to register with the Ontario Securities Commission. This criterion demonstrates their commitment to being open and honest, managing resources effectively, and providing accurate reporting.
Conclusion
Mortgage Investment Corporations, or MICs, were established in Canada to assist with housing issues and to provide attractive investment options for a wide range of investors. MICs use private loans, allowing both individuals and large corporations to invest in the real estate market; however, as with any other investment, potential investors should conduct extensive research and seek expert advice to make informed decisions that are consistent with their financial goals and risk tolerance.
If you want to invest your money in mortgages and want to become a property shareholder and investor at the same time, Versa Platinum is here to assist you. Being a leading mortgage investment corporation in Abbotsford, we are here to help you earn consistent and risk-free returns on your investment. Contact us today to get started.
