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The Benefits of Investing in Second Mortgages

By
Real Estate Agent with Exit Realty Matrix

People across the country are looking for good investment ideas right now. In the wake of plummeting stocks and shaky businesses, many are electing to simply put their money into savings to draw 1 or 2% interest rather than risk the huge losses that can accumulate from stocks and other investments.

What most people do not realize is that there is another option. Investing in mortgages secured by real property can be a lucrative way to increase your return and the risks, though they exist, are lower. Investing in second mortgages with as little as $5,000 can provide a return of up to 12%! These programs are even qualified RRSP, RRIF, TFSA and RESP investments and can yield more than twice the return of stocks, mutual funds or GIC's.

What makes these investments more stable than others is the fact that the security behind a mortgage is real estate property. The second mortgage is registered on a property's title. With the prospect of losing their home before them, the homeowner is VERY motivated to make that payment each month. Real Estate has always been a great investment and that fact reinforces the strength of second mortgage investments. And, even if the borrower defaults, the property can be used to pay off the mortgage and ensure your return on investment.

Another great point is that, with most mortgages, the majority of the interest is paid early on. Mortgage payments in the first 5-10 years contain very high interest payments to ensure that the lender receives the most return possible.

Some important questions to address when investing in second mortgages are:

  1. What is the length of the mortgage?
  2. What is the interest and how is it calculated?
  3. Is interest paid monthly or annually?
  4. If the homeowner pays the mortgage off early, how does that affect your return?
  5. Will the homeowner be signing a personal guarantee for the mortgage?

If you would like more information regarding Investing in Second Mortgages, I will be hosting a FREE Introductory Seminar on Thursday, April 28th. This seminar will cover all of the information you need to get started investing in Second Mortgages and show you how you can earn a 10-12% return with as little as $5,000! For more information and to register for the seminar please see the event details below!

What:     7 Insider Secrets on Investing in Second Mortgages
When:    Thursday, April 28, 2011 6pm - 7pm
Where:   The office of Pat Hebert
                 100-5300 Rue Canotek Road. Ottawa, ON, K1J 1A4

Register: Email admin@ajplant.com to confirm your seat at the seminar!

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