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Thank You for 30 Years!

Magenta is celebrating its 30th anniversary. In this post, we are saying thank you to our employees, partners and customers.

Spring has sprung on our 30^th anniversary, ushering in with it not only a time of hope and new beginnings, but a return to the past. The snow is finally lifting from the forgotten labours of past summers and falls, making the old new again. There is no more fitting time to remember those who’ve helped us get this far. We can’t wait for you to see how much farther still we’ll go together.

To Our Employees ​

Since our very first employee, Margot Pratt, joined us in 2002, Magenta has empowered its team with not only flexible and rewarding career opportunities. Magenta is composed of curious and industrious professionals who want to make meaningful contributions. They value personal growth, professional development, and are united by a shared belief that tomorrow matters.​

Over the last few years, we sought talent from across Ontario, allowing us to draw from the unique strength that comes from a diversity of perspectives that arise from our varied personal and professional backgrounds. Margot remarked at our 25^th anniversary, “it is rightly said that it does not matter where you go in your life, but what matters most are the people whom you have beside you on the way, and Gavin always expressed his gratitude and appreciation for having us by his”.

It has been no small feat to build a company that can stand the test of time, weathering 2008’s recession as surely as 2020’s pandemic. This company was built on a foundation of commitment. That commitment comes from staff members who aren’t just human resources, but owners and shareholders.

This year, we’re celebrating not only our leadership team, composed of 50% women, but the over 50% of our employees that are women by continuing to sponsor Canadian Mortgage Professional’s Women in Mortgages summit. Stay tuned to our #hertomorrowmatters hashtag for more.

In the words of our CEO and founder, Gavin Marshall, “I want all of you to find your Magenta, just as I was blessed to do, for the Magenta journey is the essential human journey – the yearning and the striving to build a better tomorrow for oneself, for one’s children and their children – to leave the world a better place than we found it.” Thank you to all those who have embarked on this Magenta journey with us.

To Our Partners

Thank you to the mortgage brokers we’ve had the pleasure of working with, both old and new. We are flattered that:

• Tracy Bennett of Bennett Capital Mortgage Architects considers us her “lender of choice for open mortgages where ratios qualify on a 50-year amortization and second mortgages allow early payout at maturity of their first”;
• Joseph Accardi of Ardent Mortgages “appreciates Magenta’s quick response time and broker compensation”, and
• Josh Findlay of Findlay Group “likes [our] competitive product offerings”.

We want to commemorate the kindness of all our broker partners by paying it forward to our shared communities. We’ll do so by donating to Tree Canada and the municipal food banks of Ottawa and Toronto in their name.

Thank you to all the other partners who have travelled with us as each day dawns. To our board members: Erin Brady, Christopher Froggatt, and Dr. Elspeth Murray. To the investment advisors that trust us with their clients’ futures. We are looking forward to continuing our relationships with existing investment advisor as well as building new ones.

And to the vendors like Ethical Swag and The Printing House, thank you for helping us make our company as sustainable as possible.

To Our Customers

Thank you to our investors for sharing in our belief in a better tomorrow. Thank you for believing in our purpose of connecting people with opportunities to build a better tomorrow. From our very first shareholder, Evelyn Kihl, who trusted Magenta “to help [her] have a comfortable financial old age and [keep her] independent”, to Beth Ferrier, whose “quality of life would not remotely resemble what it is now, had [she] not invested in Magenta so many years ago”, we wouldn’t be Magenta without the faith you’ve placed in us. We are saying thank you through a random act of Magenta later this year. Stay tuned!

The Way Forward

Susan Marshall, Gavin’s wife and steadfast supporter, named this company. She encouraged Gavin to pursue his vision, reminding him of his childhood fondness for watching the sunset and wondering what that beautiful tomorrow will bring. “Magenta is the realization of the dream of a small boy growing up on Roblin Lake who became the man I fell in love with. It has enabled him to provide the very best of opportunities and experiences to the people he cares for, to share not just in wealth, but in the promise of new tomorrows.” Thank you for travelling with us.

Magenta will continue to build upon its 30 years of helping our customers achieve a life defined by possibility. Our team is committed to making meaningful contributions and aspiring to do more for our customers and our community. Together, with our partners, we look forward to embarking on another 30+ years.

Thirty Years of Magenta

Magenta is celebrating its 30th anniversary. In this post, we are discussing our journey from 1994 to 2024 and the way forward.

A New Way of Thinking About Mortgages

A sunset between a boy and his father inspired a new way of thinking about mortgages. “I think they call it Magenta,” the boy would later remark.

Creating a Purpose

Magenta gained its very first shareholder in 1994.

Dreaming of a life defined by the possibility he could give his children, rather than a life defined by limitations, Gavin Marshall, Founder & CEO of Magenta, struck out on his own in 1998. It all began in the inaugural headquarters of the Marshall family basement.

Eight years into creating the Magenta he envisioned, Gavin said farewell to the basement and moved to an office in downtown Perth with his first employee. At that time, Magenta’s AUM (assets under management) was $4 million, and within a year of moving, its AUM doubled.

Magenta soon outgrew that first office in Code’s Mill (now a lovely wedding venue, we’re told), moving down to roomier 47 Gore Street East to accommodate a larger staff of 4. It was this tight-knit crew that weathered the 2008 recession with zero loan loss.

In March 2011, Magenta became registered as an Exempt Market Dealer. This allowed us to trade in exempt securities in Alberta, British Columbia, New Brunswick, and Ontario. Later that year, Magenta hit $100 million AUM.

By the fall of 2012, seeing a need for senior talent to help manage the burgeoning company, Magenta settled in a new office on Boyd Avenue in Kanata. The intention was to attract those unable to make the trek to Perth and increase Magenta’s access to their Ottawa-based broker and investor bases. In 2015, Magenta moved to the current, and far more conveniently located, Kanata office on Terry Fox Drive.

Two years later, Magenta hit $300 million AUM. What followed, in 2020, is known to many: The COVID-19 pandemic. It was a catalyst for transforming the company as we embraced remote work and recruited talent from across Ontario. By 2022, well over 45 employees strong, Magenta said farewell to Perth, sunsetting the Gore Street office. It formally transitioned its headquarters to its current First Canadian Place location in Toronto. Magenta also surpassed $500 million AUM in that Spring.

This past year Magenta spread its hue through industry events, blogs, and social media, celebrating Pantone’s Viva Magenta as colour of the year and acting as a key sponsor of CMP’s inaugural Women in Mortgages Summit in June.

Magenta has evolved over the years and solidified its purpose to connect people with opportunities to build a better tomorrow. In 2024, we mark 30 years and set our sights on living our purpose, saying thank you and giving back.

Saying Thank You

Magenta is successful because of the people it works with. The relationships we have with our customers, partners and employees are key to our growth.

Three decades of personalized service and reliable income for our investors allowed them to build for their tomorrows. They have been able to leave legacies behind through community involvement, while others have created generational wealth and opportunities for their loved ones. Whether they have come to Magenta directly, or they found us through an investment advisor, we thank them for their support throughout our journey.

A huge contributor to Magenta’s growth is our broker partners. We understand that a broker’s reputation with their client is the cornerstone of their business. Magenta always seeks to deliver exceptional service to our broker partners, offering flexible, easy and valuable mortgage products for the unique needs of alternative borrowers. We thank our broker network for their partnership over the last 30 years.

We officially became Great Place to Work certified in 2022. At Magenta, we foster a culture of innovation, inclusivity, and empowerment. Of course, this is not possible without the support of the Magenta Team and their dedication to helping our customers and partners build better tomorrows.

Giving Back

Magenta is a believer in the idea that progress is about more than just more – it’s about creating a more caring and just world. We know our lending areas intimately and we hope to give back to the areas that our customers and partners reside in. When we say ‘Your Tomorrow Matters’, that means everyone’s tomorrow matters. That’s why Magenta makes philanthropy a priority. We recently supported CHEO (Children’s Hospital of Eastern Ontario in Ottawa) and the Hospital for Sick Children in Toronto, through our broker network. Additionally, Gavin has been instrumental in Trent University’s Campaign for Momentous Change. On the environmental front, we partnered with Carbonzero to measure, manage, and mitigate our climate impact, and practice carbon offsetting to sponsor real and verified reductions in greenhouse gas emissions.

The Way Forward

Magenta will continue to build upon its 30 years of helping our customers achieve a life defined by possibility. Our team is committed to making meaningful contributions and aspiring to do more for our customers and our community. Together, with our partners, we look forward to embarking on another 30+ years.

Spotlight on Second Mortgages 

At Magenta, we know there are many reasons why clients choose to take out second mortgages. For some, second mortgages are valuable financial management strategies for dealing with debt efficiently at lower interest rates. For others, second mortgages are an avenue for funding the acquisition or improvement of homes, paying tuition for oneself or one’s family, or any one of life’s other major expenses.

Business For Self

Magenta offers second mortgages tailored to the needs of alternative borrowers whose unique circumstances may not be best served by other financial institutions. For instance, consider the small business owner looking to use home equity to fund their business. If that business has a significant cash component, it would lack the verifiable income needed to qualify for a bank loan. But with Magenta’s Stated Income Program for Second Mortgages, that borrower would only need to provide non-traditional income documents like business ownership, bank statements and other supporting documentation to qualify for a Stated Income Second Mortgage with up to 75% loan-to-value (LTV).

Rentals

Consider also the property investor hoping to get a second mortgage on a rental property, but running up against the limits banks place on the number of rental properties a borrower can have. With a Magenta Second Mortgage for Rental Properties, not only is there a 100% offset on rental income with no maximum number of doors, there is up to 75% LTV on student rentals. Furthermore, Magenta offers  2-year terms in addition to traditional 1-year terms to better suit the needs of a property investor’s longer view.

Our solutions are designed not only to address your client’s short-term credit challenges but also to help them return to traditional lending channels as soon as possible. Keep reading to find out why Magenta’s mortgages are worth a second look:

Smaller Monthly Payments

We offer up to 50-year amortization, or interest-only payments, and balance our rates and fees in favour of smaller monthly payments, passing the benefits on to your client’s cash flow.

New Longer Terms

Magenta is proud to have recently added 2-year terms as an option on our second residential mortgages, in addition to our traditional 1-year term offerings.

24-Hour Quick Closes

If a borrower’s lending institution option falls through, our team will put in the work to help you meet your client’s deadline.

Capitalized Fees

We capitalize lender fees and broker compensation, meaning the cost is added to the client’s principal and spread over the life of the mortgage.

No Notice of Assessment? No Problem

Even clients with low or no documentation verifying their income are eligible for second mortgages through Magenta, subject to only a small increase in their starting fee.

Simplified Financial Planning

We’ll match the maturity date of our second mortgage solution with your client’s first mortgage, simplifying their financial planning.

A selection of second mortgages funded this year (borrower and identifying property details have been removed):

* Small Centre refers to properties located in towns with a population of 1,000 or more within 45 minutes of one of our urban centres.  Rural refers to properties with septic and well access within 45 minutes of one of our urban centres.

Second Mortgages are available in urban, small centre and rural locations throughout our lending areas. Please view our Google Map or speak with your Magenta representative to find out more.

Interested in what Magenta has to offer?  Connect with our mortgage origination team, or click here to learn more.

Five Discussions to have with your Clients

As a new Mortgage Agent there is a lot of information to take in including processes and regulations. Learning how to conduct a thorough client interview and submit an application in good order is key to hitting the ground running. Successful Mortgage Agents provide full, detailed applications and clearly demonstrate that they know their client. How do you do that effectively? You ask the right questions, listen and take notes.

Here are 5 basic conversations to have with your client to help you gather the information you need:

Question 1: “Tell me about your credit history.”

Your follow-up questions should cover:

• How long they have had credit
• How they pay their credit, i.e. paying minimum payment or full balances
• Whether they have missed payments
• If they have co-signed any loans
• If they have had any collections, judgments, support payments, bankruptcies
• Whether they have filed/paid their income taxes and are they up to date on property taxes

Question 2: “Tell me about your income.”

Your follow-up questions should cover:

• All sources of income
• If they are self employed, how the business is set up, i.e. sole proprietorship or incorporated
• How long have they been at their current and previous jobs
• How stable and consistent is their income?

Question 3: “Tell me about your property.”

Depending on whether it’s a new purchase or refinance, your follow-up questions should cover:

• What type of property is it, i.e. owner occupied, rental, mixed use
• How long have they lived there
• Any improvements they have done or improvements needed
• Unique features of the home
• Known negatives, e.g. previous fire or flood damage

Question 4: “Tell me about your future plans and goals.”

Your follow-up questions should cover:

• How long they intend to stay in their home
• Whether they expect lump sums of income, e.g. work bonuses, inheritance etc.
• Any anticipated job changes
• Expected changes to family, e.g. newborn children or college costs

Question 5: “Tell me what’s important to you about your mortgage.”

Your follow-up questions should cover whether their priorities include:

• Flexible payment options
• Prepayment penalties
• Portable/assumable
• Lowest payment vs quickest payoff

An effective Mortgage Agent will take the time to have a thorough conversation with their clients, personalize the experience by asking the right questions, and then listen. Once you have a complete picture of your client’s situation, you can readily place them with the lender with whom they have the best fit.

Digital Safety with Magenta: Password Protection

In today’s digital age, protecting your financial identity is vital. With the launch of our online broker and investor portals, we want to ensure you are following digital safety best practices around identity theft and financial fraud.

Our Broker Portal is an integral part of our delivering fast, flexible, and easy mortgage solutions for our brokers servicing the needs of alternative borrowers.

Our Investor Portal serves as a convenience feature for our investors never wavering on our commitment to personalized service.

Scroll down to learn more about how you can explore our customer portals while ensuring you are safe with your information.

Protecting Your Identity

Protecting your identity starts with securing your digital presence. Your online accounts, especially those related to financial services, are prime targets for cybercriminals. The security of these accounts heavily relies on the strength and secrecy of your passwords.

Passwords serve as keys to your digital life. They grant access to your email accounts, social media profiles, online banking services, and more. Therefore, the security of your passwords is directly tied to the security of your personal information.

The Importance of Password Protection

Password protection is a critical aspect of online security. A strong, unique password is the first line of defence against unauthorized access to your accounts. Strong passwords keep your personal information confidential, protect your identity and ensure the security of your assets. Weak passwords are easily guessable and crackable, making them a soft target for cybercriminals. They can lead to unauthorized access to your accounts, identity theft, financial loss, and even damage to your reputation.

How to Create a Strong Password

• A strong password consists of at least 8 characters and includes a mix of uppercase and lowercase letters, numbers, and symbols (for example, Gr@H4!7#).
• Avoid Personal Information: Your password should not contain easily identifiable information such as your name, birthdate, or common words.
• Changing your password every six months enhances your account’s security by making it harder for cybercriminals to gain unauthorized access.

Digital Safety Tips to Keep in Mind

• Your financial institution will never ask you for your personal information through email or text.
• Always contact your financial institution when in doubt or if you notice any unfamiliar activity on your account.
• Some financial institutions use multi-factor authentication to reset passwords. Make sure you are familiar with which institutions will text you a temporary password.

Password Hygiene With Magenta

• Magenta will not prompt a password reset on its own. You will always prompt your password reset.
• Your password reset will come to you through the email that you used to register with the portal.
• We will not initiate a temporary password after the account activation Welcome email.
• Never share or give your password away.

Click here to access the Broker Portal.

Click here to access the Investor Portal.

Disclaimer: The opinions and viewpoints presented in this document are exclusively those of the several writers and do not represent the perspectives of any associated individuals or organizations, including but not limited to the writer’s current or former employers. Efforts have been made to verify the accuracy of the information and analysis provided, but it is intended purely for informational purposes. The writers alone are responsible for any opinions, forecasts, or predictions made. No guarantees are made regarding the precision or completeness of this document’s contents. This document is not intended to offer professional or investment advice. The writers are not liable for any consequences resulting from reliance on this piece. It is advised that readers consult with a certified expert before making any financial decisions.

Financial Literacy Month: Protect Your Financial Rights

It’s National Financial Literacy Month (FLM), where the Financial Consumer Agency of Canada (FCAC) helps equip Canadians with practical tools and tips to manage their money in a changing world. Throughout November, the FCAC is discussing the ever-changing financial marketplace and the importance of checking up on financial health.

At Magenta, our goal is to connect people with opportunities to build a better tomorrow. This month, we’re furthering our goal by supporting National Financial Literacy Month and sharing resources dedicated to helping Canadians:

• Get the pulse on their financial health
• Check up on their debt
• Prepare for and handle a financial emergency
• Optimize their financial health

For the final week of Financial Literacy Month, we’ll be discussing:

• protecting your financial rights;
• financial rights when borrowing money; and
• sharing resources to help you understand your rights and responsibilities when dealing with financial institutions.

Protecting Your Financial Rights

The best way to protect your financial rights is to understand what rights you have in the first place. Did you know that Canadian laws and regulations help ensure that financial consumers are protected, have access to basic banking services, and are treated fairly by financial institutions? These regulations include your right to:

• open a personal account at any bank with proper identification;
• cash a Government of Canada cheque for free at any bank with proper identification;
• receive clear and simple information that’s not misleading about products and services;
• get products and services for which you’ve provided express consent; and
• have your issues resolved through a bank’s complaint-handling process.

Understanding these regulations is the first step to ensuring you can protect your financial rights when dealing with your financial institution(s).

Paying Your Mortgage & Your Financial Rights As A Borrower

When it comes to paying your mortgage, banks are also expected to help consumers who are experiencing financial difficulties due to exceptional circumstances. If you are struggling to pay your mortgage, it’s important that you contact your bank to learn about the relief measures that may be available to you, such as making a special payment arrangement, converting your interest rate, and mortgage deferral programs.

In November 2023, the Liberal government released the Fall Economic Statement (FES), which detailed an initiative it calls the Canadian Mortgage Charter. This charter builds upon the existing expectations related to how financial institutions treat their borrowers. To learn more, please click here: “The New Canadian Mortgage Charter Explained“.

As a Canadian borrower, you have rights when applying for a mortgage, making prepayments, renewing your mortgage, and more. Click here to explore these topics and learn more about your financial rights as a borrower.

Understanding Your Financial Rights & Responsibilities

When dealing with financial institutions, the FCAC has compiled a list of helpful resources designed to help you understand your financial rights and responsibilities. Below, please find a list of some of these resources:

• Protection for bank customers: New and enhanced protections when dealing with your financial institution.
• Knowing your banking rights: Your rights for opening a bank account, cashing cheques, account fee increases, and more.
• Knowing your mortgage rights: Your rights when applying for a mortgage, making prepayments, renewing your mortgage, and more.
• Saving and investment rights: Learn more about your rights as an investor in registered savings plans or other investment products.

Please visit the FCAC’s “Financial rights and responsibilities” page to explore more resources available to you regarding your financial rights.

Thank you for tuning in this month with Magenta as we’ve explored the weekly themes of Financial Literacy Month. To learn more about Financial Literacy Month and see additional resources provided by the FCAC, please click here.

What is a Mortgage Investment Corporation (MIC)?  

A Mortgage Investment Corporation (MIC) is an investment fund where investors pool their money to lend to borrowers as private mortgages. By adding their money to this pool, an investor purchases shares in a MIC. This is an alternative fixed-income investment: a security which pays investors fixed amounts on predetermined dates. Most MICs then supplement the pool of shareholder funds by borrowing money from banks in the form of loans, though the precise arrangement varies from MIC to MIC.   

This combination of shareholder funds and bank loans is then lent by the MIC to borrowers in turn. Collectively, the agreements of these borrowers to repay the MIC, together with the real estate that serves as these agreements’ collateral, compose the MIC’s mortgage portfolio. When the borrowers make their mortgage payments, any associated fees and interest are cycled back into the fund. This allows the MIC to pay shareholders their dividends, and if the MIC was themselves a borrower, the banks their interest.  

Regulatory Requirements  

MICs are subject to regulatory requirements and oversight, ensuring compliance with securities laws and investor protection. In Canada, MICs have been commonly used for real estate investment since 1985, when they were created as a result of Section 130.1 of the Income Tax Act. This federal statute allows investors to invest in a pool of mortgages.  

In Ontario, the Ontario Securities Commission is the regulatory body responsible for the management and operation of MICs. The Income Tax Act requires mortgage investment corporations to distribute 100% of net income, as verified by independent audit, to shareholders by way of dividends. Typically, a Board of Directors also provides additional strategic oversight.  

Choosing the Right MIC  

Choosing which MIC is right for you is not as simple as who has the highest Return on Investment (ROI). It’s important for investors considering a MIC to carefully assess a corporation’s portfolio composition, track record, and mortgage underwriting process. To learn more, check out our “Selecting The Right Mortgage Investment Corporation” blog post. Make sure to assess your own overall risk profile before choosing to invest in a MIC. This could involve consulting with a financial advisor or professional to understand the specific details and risks associated with a particular company.  

About Magenta  

Since 1994, our goal at Magenta has been to empower our investors to build for their tomorrows and achieve peace of mind. Magenta has delivered our investors strong returns and reliable income while safeguarding capital by applying a risk-mitigated portfolio strategy. We hand-pick our portfolio of residential, primarily first mortgages located exclusively in carefully selected Ontario markets.  

Investing with Magenta offers:  

• Regular income  
• Liquidity  
• Flexibility  

Our team of experts will work with you every step of the way to keep you informed and assist you with investment information so you can determine what best suits your needs.  

Like this blog? For more content like this, click here.  

Selecting the Right Mortgage Investment Corporation 

Early on in your journey into alternative investment options, you likely came across the term Mortgage Investment Corporation (MIC). MICs have entered the spotlight in recent years as a key piece in both the wealth accumulation and the wealth preservation strategies of a variety of investors. This surge in popularity can be credited to the many advantages this investment format has to offer, such as reduced risk through diversification, as well as strong and reliable rates of return. 

Choosing which MIC is right for you is not as simple as who has the highest Return on Investment (ROI).  

Here are five factors to consider when deciding to invest in a MIC:  

1. Liquidity 

Read the subscription agreement closely to see how quickly you can withdraw your investment.  No one wants to be in a situation where they need access to capital but are stuck in a long waiting period to withdraw an investment- and some MICs will only allow redemptions once per year.  

2. Consistency 

Ask for information on the past 5-10 years’ actual ROI vs. target ROI.  Not only will this give you a sense of how accurate the MIC is at estimating ROI, but it also indicates if the MIC can consistently meet or exceed target ROIs. While macroeconomic factors such as the Bank of Canada rate directly affect MIC ROIs, it’s still vital to look for trends in the data to determine the growth trajectory of a MIC.  

3. Risk 

Learn which housing markets you are investing in and what types of mortgages your money is financing.  The specific housing markets and types of mortgages that compose a MIC’s portfolio, whether urban or rural, first mortgage loans or second mortgage loans, are important factors that go into how a MIC determines interest rates and subsequently the potential pitfalls associated with an investment.  You should find a MIC whose acceptable level of risk matches your own.   

4. Reward 

Ask when and how dividends are distributed, especially if you plan to reinvest the dividend in the MIC, as the investment is compounded based on a predetermined schedule. Not all MICs issue dividends on the same schedule, some issue monthly, some quarterly, and others annually.  

5. Communication

Prudent investors keep tabs on their investments, and prudent MICs know that the best questions are the ones shareholders shouldn’t have to ask. Check to see not only that the MIC reports with clarity and regularity, but that they can handle ad hoc requests for information. You never know when you’ll need to be able to access relevant details related to your investment at a moment’s notice. Your prospective MIC should have an investor relations manager ready to answer questions, provide additional information, or help you understand the product.  

Investing with Magenta 

Since 1994, our goal at Magenta has been to empower our investors to build for their tomorrows and achieve peace of mind. Magenta has delivered strong returns and reliable income to our investors while safeguarding capital by applying a risk-mitigated portfolio strategy. The portfolio is constructed of residential, primarily first mortgages located exclusively in carefully selected Ontario markets. 

Investing with Magenta offers: 

• Flexibility 
• Liquidity 
• Regular income 

For more information about investing with Magenta, click here. 

Open Term Versus Closed Term Mortgages: Know What Works for You

There are many things to consider when your mortgage is coming up for renewal. As the maturity date approaches, your renewal paperwork will arrive and you will probably be offered the option of opting for either an open term or a closed term.

Confused as to what the difference between the two might be?  Here is a breakdown of what each type of term involves:

Open terms
Open terms always have a higher interest rate as it expected that the mortgage will be paid out on or before the maturity date.  30 days’ written notice is generally required in the event of full or partial pre-payment.  A bonus is calculated on a per diem (per day) interest basis will apply in the event that written notice of less than 30 days is provided (e.g. 15 days’ written notice –  bonus equivalent to 15 days’ interest).  Notice must be in the form of a written request from the mortgagor’s solicitor, a title insurance company, or a financial institution, specifying the amount and date of the prepayment.

Closed terms
Closed terms receive a lower interest rate, but it is expected the mortgage will remain until maturity. In the event of pre-payment in whole or in part prior to the maturity date, a pre-payment penalty equivalent to the greater of: a) three months’ interest at the interest rate prescribed in the renewal agreement; or b) the interest rate differential based on the difference between the interest rate prescribed in the renewal agreement and the lender’s posted interest rate for a closed term that is the next shortest to the remaining term of the mortgage will apply. The pre-payment penalty will be calculated on the principal amount to be prepaid.

Choose the type of term that works best for you and return the completed paperwork to your lender. It’s a good idea to make note of the first date of your new payment and the new amount that will be debited from your account.

About Magenta Capital Corporation
Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 24-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.

For more information, call us at 888-267-1744 or  visit Magentainvestment.ca.

The Mortgage Renewal Process: What to Expect During the Mortgage Renewal Process

The maturity date of your mortgage is fast approaching. The maturity of your mortgage gives you an opportunity to review your financial situation and make some decisions based on your financial goals and current situation.

If you discussed an exit strategy with your mortgage broker, you may be preparing to refinance with a new lender at a lower rate. If it suits your needs to renew your current mortgage, here are a few things to keep in mind both before and during the process:

Here are some tips to prepare for your renewal.

1. Ensure your account is current: If your mortgage account has fallen behind, make arrangements to bring it back into good standing. Work with your lender to find a solution that suits everyone.  Small changes, such as moving your monthly payment to a new day, can make a difference.

2. Keep your home insurance in good standing: If your insurer has changed since you originally obtained your mortgage, make sure you let your lender know!

3. Keep the home in a good state of repair with no deferred maintenance: Don’t put off those home maintenance projects, big or small. Touch up the paint. Mow the lawn. Make sure the roof, furnace, and electrical wiring are in good repair.

What to expect at renewal.

1. Renewal Options: Your renewal options will be sent to you in advance of the maturity date. Review the options you have been offered. You may wish to discuss your options with your bank or mortgage broker.

2. ‘Business-for-Self’ Income: If you are ‘business for self’ or have ownership in a business, you may be asked to provide confirmation that HST and Source Deductions are being remitted to Revenue Canada.

3. Second Mortgages: If you have a second mortgage you may be asked to provide a current first mortgage statement. Most lenders will either send these out annually, or provide a way for you to access the information on their website or via online banking.

4. Income Verification: You may be asked for updated income verification. Gather or print your two most recent pay stubs, just in case you need them.

5. Appraisals: You may be asked for a new home appraisal. Appraisals always make note of any instances of deferred maintenance that are noted during the inspection. This is why keeping on top of projects around your home is so important.

Following these tips can ensure your mortgage renewal goes as smoothly as possible.

About Magenta Capital Corporation
Established in 1994, Magenta Capital Corporation (MCC) is one of Canada’s oldest and largest Mortgage Investment Corporation (MIC) managers.  MCC sources, underwrites and manages a portfolio of primarily residential first mortgages, secured by properties located in Eastern and Southwestern Ontario, two of the strongest, most recession resistant real estate markets in the country. MCC has a 24-year track record of generating superior returns for the shareholders of Magenta Group MICs.  MCC exercises oversight responsibility for the Magenta Group MICs in its capacity as General Partner of three limited partnerships, each of which is wholly owned by one of the MICs.

For more information, call us at 888-267-1744 or  visit Magentainvestment.ca.