| (NC)-Investing money in a private mortgage for | | | | borrower and appraiser; |
| attractive returns has its merits and its risks. This type | | | | - any interest the broker has in the property; and |
| of investment is one in which a person lends money to | | | | - the broker's fees for the transaction. |
| a borrower who pledges real estate as security for | | | | By law, the broker cannot accept money from you |
| the loan. These types of mortgage investments may | | | | until 48 hours after you have received this specified |
| be arranged through a Mortgage Broker. | | | | information and have signed a commitment to fund the |
| All Mortgage Brokers in the province of Ontario are | | | | mortgage. |
| required to be registered with the Financial Services | | | | Do your homework |
| Commission of Ontario (FSCO), an agency of the | | | | It took a long time to save the hard-earned money you |
| Ministry of Finance. | | | | want to invest, so it's wise to carefully review all |
| Do business only with a licensed Mortgage Broker. | | | | documents before making any decisions. You are |
| Confirm that the broker you are dealing with is qualified | | | | entitled to take at least 48 hours (not including Sundays |
| and registered by visiting FSCO's website: or by calling | | | | and holidays) to review the investment documents. |
| (416) 226-7776. | | | | Read them carefully. |
| Mortgage Brokers must give you full information | | | | Consider the value of the real estate. The Mortgage |
| Mortgage Brokers are required to provide each | | | | Broker must provide documentary evidence of the |
| prospective investor with information in the form of an | | | | property's value, other than an Agreement of |
| Investor/Lender Disclosure Statement, as well as | | | | Purchase and Sale. This could include an appraisal. |
| supporting documents such as an appraisal and an | | | | Unlawful activity |
| Agreement of Purchase and Sale. | | | | Mortgage Brokers are prohibited from selling or |
| This information package must include: | | | | arranging the sale of mortgages that are, or have |
| - a description of the property or project to be | | | | been, in default within the past 12 months. |
| mortgaged; | | | | Mortgage Brokers cannot accept funds from you to |
| - the terms and conditions of the mortgage loan; | | | | hold for a future investment. |
| - how the mortgage will be administered; | | | | Risks to consider about mortgage investments |
| - in case of mortgage syndications, terms of the | | | | - They are not insured by the Government of Ontario. |
| syndications; | | | | - They cannot be guaranteed by the Mortgage Broker. |
| - all prior claims on the property, such as other | | | | - They may be difficult to resell quickly. |
| mortgages, liens or taxes owing; | | | | Mortgages can be high-risk investments. Consult your |
| - information on the borrower, including ability to repay | | | | financial advisor to see if mortgage investments would |
| the loan; | | | | be suitable for you. |
| - any relationship or connection the broker has with the | | | | |