1. Who is qualified to become a CLI private mortgage investor?CLI typically works with high net worth or very high income bracket individuals, family offices, private Trusts, and even other institutional or MICs to invest in our mortgage loans.
2. What is the least that I can invest?The smallest loans we normally see are in the $25,000 range, and would be second mortgages. For smaller investors, an alternative could be to invest in one of our syndicates where we start at $150,000 normally. Our Mortgage Investment Corporation, CLI MIC, is also a good option for those looking to invest a smaller amount. Visit www.cmimic.ca for more information.
3. Can I hold mortgages in my registered account(s) (RRSP/RRIF/LIRA/LIF)?Yes, provided that your registered funds are hosted with a Plan Administrator that accepts 3rd Party Private Mortgages as an acceptable investment asset. There are a number of companies that offer this service if your plan Administrator does not, and we can put you in touch with them. Olympia Trust is the most common, though we are able to work with any trust companies that support self-directed mortgage investments.
4. How soon will I be able to get my money out?Mortgages are normally provided on a first come first serve basis, and are provided to investors on specific matching basis rather than lists or broadcast. Depending on your amount of capital available and overall flexibility on terms or location, funds can be put to work quickly or can take longer if you are looking for something very specific. For existing investors, we ask that if you have mortgage payouts coming due, that you try and provide us with 30 to 60 days notice so that we can put you on our upcoming funding calendar.
5. Is there a specific yield that is offered or guaranteed?No. We provide specific mortgages or syndicate opportunities, we are not a fund. Our investors are seeking greater transparency than a fund, and less potential liquidity consequences in the event of a downturn. Overall, we offer mortgage product ranging in yields from 6 to 18%, and once we consult with you we can help assess and determine where you should fit within that mix if you don’t already know. If you prefer a fund opportunity, visit our sister company, CLI MIC, at www.cmimic.ca
6. When will I receive my return/income?The majority of our mortgages are scheduled to provide payments on a monthly basis, and will be always paid on the 1st of the month by way of post-dated cheque or direct account deposit (for registered funds).
On occasion we also have loans where all of the interest may be deducted or prepaid from the initial advance, which means that the return is provided at the end of the term (typically 6 or 12 months later)
7. Will the mortgage values fluctuate?No. We are not a stock. Since you are making a specific loan, tied to a particular property, the value of your loan and interest agreed to at the start of the contract will be upheld throughout. Should the borrower’s property value go down, the loan value would only be affected in the event that ALL of the borrower’s equity was wiped out, AND the borrower had no further equity, assets, or additional properties to cover a deficiency.
8. Can I get my money out early?In select cases yes, but typically no. Loans are committed to for a specific period of time by the investor, to the borrower. Until that loan matures, the funds are not obtainable. There is also some chance that there may be a delay in payout. Interest continues to accrue during this time, and sometimes there can even be bonus interest penalties that our investors earn as a result of delayed or early payouts. This can further increase the return overall.
In some circumstances, it may be possible for us to resell or re-assign your mortgage to another investor, however that would depend on many factors.
10. What fees am I going to be charged?None! One of the often repeated favourite things our investors love about our program, even our administered loans, is that unlike many companies we do not charge our investor any fees whatsoever. Rather, the borrower is responsible for all of the costs of the loan including appraisal, legal fees, investor funds deposit costs, discharge fees, and any administrative penalties (for serviced loans).
11. How likely is it that my mortgage may have a problem?In the last five years, over hundreds of loans, we have had only a handful of loans that we have had to take from start to finish through the legal process and list/sell on the market.We take pride in having a lower default and foreclosure rate than many trust companies and even some “A Lenders”.
While we take every possible precaution to underwrite and organize the mortgages to be on positive premises and with borrowers that can pay, from time to time there MAY be a hiccup. For managed loans, we take care of any issues directly with the borrowers including organizing replacements for any bounced cheques, insurance matters, or defaults.
12. Who will answer investor questions on an ongoing basis?Today, our investment division Canadian Mortgages Inc. has a staff of over 10 people. We have many staff who can service you, including two different investment co-ordinators, two different loan administrators (for after closing), and multiple underwriters and fulfilment officers who help facilitate the closings themselves. You can rest assured that catering to our investors is our #1 priority at all times.