How Westboro Invests your funds:
In accordance with the rules outlined in the Income Tax Act for MIC's, Westboro invests its capital, raised through the sale of shares, to fund a pool of mortgages. The mortgages funded by Westboro will be scrupulously regarded by the management team.
Westboro's philosophy is to provide investors with the following:
- Security: Preservation of capital
- ROI: A fair return in keeping with current market
- Stability: Regular, consistent dividend payment
Westboro invests a minimum of 75% of its capital in residential first and second mortgages and up to 25% of its capital in commercial mortgages.
The loan to value ratio of the granted mortgages is determined by the qualification of the borrower and the marketability of the real estate. All real estate is evaluated by an accredited appraiser in order to determine its value. With excellent qualifications and prime real estate a loan to value of up to 85% may be considered, while in the case of fair qualifications and a rural setting we would generally limit the loan to value to 65%. The maximum loan to value ratio in any case is set at 85%, which insures that adequate equity remains in the property. Ultimately the equity in the properties in which WMIC invests is what allows us to protect your capital while offering excellent returns on investment.
All mortgages granted by Westboro Mortgage Investment Corporation are secured by real estate located in Ottawa and the surrounding areas, which are familiar markets to the Westboro management team, thus reducing the risks associated with investing in unknown markets.
The Westboro management team is responsible for all aspects of the portfolio administration once the mortgages are advanced. These responsibilities include the collection of payments, the verification that property taxes and/or any prior encumbrances are up to date, that adequate insurance is maintained on the home and other administrative tasks such as renewals and discharges.
The majority of revenues generated by WMIC are from interest payments and fees. Interest from the given mortgages is usually collected monthly insuring a steady stream of income. The above mentioned fees can include a commitment fee (or lender's fee) which is paid by the borrower upon receiving the mortgage, prepayment fees, NSF or late payment fees that are collected as need be, a discharge fee which is collected upon the discharge of the mortgage, renewal fees and various fees for non-compliance such as tax arrears or failure to maintain adequate insurance on the property.
One should note that under the Income Tax Act, the net income generated by a mortgage investment corporation can and must be entirely redistributed to its investors without accruing any income tax, which increases the investors yield (for more information please see What is a MIC?). This investment is therefore not subject to a "double taxation" such as the majority of other common or preferred stocks.
