How to Choose a Mortgage Investment Corporation

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January 10, 2023

The right Mortgage Investment Corporation (MIC) can help you diversify your investment portfolio and enhance the future growth of your investments. Instead of investing in singular real estate projects, a MIC allows you to invest in a pool of mortgages specifically sourced by the management team based upon predetermined criteria. With several MICs available, it can be difficult to determine which option is best for your investing goals and personal preferences. That is why the team at PHL Financial Group has compiled some information on crucial questions to ask before making a final decision. By having these questions answered, you will understand how to choose a mortgage investment corporation that aligns with your goals, needs, and preferences, making it worth your time.

4 Questions to Ask Before Investing With a MIC

The following questions can help you learn more about the goals, strategies, policies, and other elements of a MIC:

1. What is Their Reputation?

This question is crucial as the answer can give you some much-needed context about the company, the amount of experience they have, and how they have navigated market conditions in the past. Check user reviews and client testimonials to gauge  satisfaction and the success they have had with the MIC. In addition to reviews, consider looking into the history of the MIC as this can give you some insight into their strengths and how much they have grown over time.

2. What Investment Strategies do they Use? Are They Effective?

Investment strategies are where MICs can differ the most. That is why it is essential to understand what their strategy is when it comes to choosing real estate projects and what their goals are for a fund. It is also worth assessing the level of risk they are comfortable with to determine if it aligns with your preferences. Some MICs also make their returns/dividend percentages public via social media or their website, so it is worth looking at this information to see if their strategies are effective. A few possible questions about the MIC could include; what is your LTV (Loan to Value)? What is your maximum LTV? What position do the mortgages hold on the loans? What is your redemption schedule? Do you pay your agents commissions? All of these, and much more, can have an impact on the MIC and its portfolio.

3. What are the Restrictions and Terms?

Accidents, emergencies, and unexpected life events happen. If you ever need to pull your investment capital out in the event of an emergency, it is crucial to understand the restrictions and terms enforced by a MIC. While some MICs invest in multi-year terms, others—like PHL Financial Group—invest in terms of one year or less, allowing for more flexibility with your capital.

4. What are the Fees?

Most MICs have fees for managing funds and other professional fees. Before choosing a MIC, be sure to ask questions about these fees so you understand how much you will be paying and where your money goes.

To learn more about our investing solutions, funds, or the advantages of investing with PHL Financial Group, get in touch with our team. We can be reached by phone at 604-579-0849 or through our online contact form and will be happy to answer any questions you may have.