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The Blue Pearl Mortgage Investment Corporation takes these investments and invest into mortgage pools.
The MIC’s management is responsible for all facets of the MICs operations.
The MIC allows individuals to pool their funds, similar to a mutual fund, and invest those funds in a diversified portfolio of residential and commercial mortgage loans. Each year, the MIC pays 100% of net income out to its investors in the form of dividends. These dividends can be taken in cash or re-invested in new shares.CONTACT US
The allure of investing in a MIC for investors is mainly driven by the fact that it typically produces an attractive risk-adjusted yield, and is secured by real estate underlying the debt.
A MIC essentially allows the public to act as the bank with real estate at the underlying security and realizing the investment return through diversification.
Mortgage Investment Corporations started in 1973 as part of the Residential Mortgage Financing Act. MICs saw a boost as early as 1981 when Parliament estimated that more than $5 billion is required in mortgage financing to keep pace with the rapid population growth across the country and the resulting financing needs.
Due to this projection, Parliament looked for a way to address the annually projected gap of $2.3 billion and supported MICs to increase mortgage funds to finance the construction of new homes by accessing the accumulated wealth of the small investors and pension funds.
MICs made it easier for small investors to participate in the residential and commercial real estate markets. MICs typically provide short-term loans ranging from 6 to 36 months secured by the real estate in Canada.
Another notable benefit of participating in a MIC investment is the ability to utilize your RRSP & TFSA funds to invest in a MIC fund directly. The income earned by your RRSP & TFSA investments are tax-free.
As a result, the tax-free interest earned from a MIC held in your RRSP & TFSA can compound tax-free and you don’t have to worry about paying taxes on your profits until you withdraw them from your RRSP.
There are various reasons as to why mortgage borrowers look into opting for MICs rather than traditional banks.
For one, MICs do not conform to the rigid and strict guidelines often imposed by financial institutions when it comes to approving loans. They also provide more flexible terms with borrowers while being able to fund loans in as little as fast as 24 hours, depending on the complexity of the loan proposal.
Borrowers thereby feel more at ease with the quick funding turnaround and the less rigid mortgage qualification guidelines. In this regard, MICs open a gateway opportunity to be able to charge interest rates that are typically above market rates.
A MIC is governed by Section 130.1 of the Income Tax Act, and to maintain its status, MICs should be able to comply with several rules. Some of these key regulations include:
We are a Canadian mortgage brokerage firm with a team of professional accredited mortgage brokers, agents and associates providing residential and commercial mortgage services.
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Our mailing address is: Blue Pearl Mortgage Unit 200 – 5570 152A Street, Surrey, BC V3S 5J9 Canada