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Magenta Gives Back

Ever since our inception in 1994, our founder has made giving back a priority. For the past thirty years, Magenta has contributed to the communities we operate and lend in.

Why Philanthropy?​

Progress is about more than just more- it’s about creating a more caring and just world. That’s why Magenta gives back to the communities we serve. Indeed, progress is achievable, when we not only believe progress is possible but are prepared to dedicate ourselves to the effort required to attain it.

Over three decades, Magenta has demonstrated this belief in our donations to organizations as diverse as:

• Canada Helps- Project Trauma Support,
• the Canadian Cancer Society,
• the Children’s Hospital of Eastern Ontario,
• Free the Children,
• Interval House,
• the Ottawa Food Bank,
• the Ottawa Regional Cancer Foundation,
• Tree Canada,
• Trent University, and
• Red Cross efforts in Lebanon and Ukraine.

We’re in the business of making tomorrow not an anxiety to escape, but as a gift to cherish and hand down. As a business, we build better tomorrows in many ways like:

• in our capacity as a lender to grant borrowers the capital to take that next step into their future;
• in our partnerships with brokers so we can help them achieve success by fulfilling their alternative clients’ needs;
• as part of an investor’s plan to leave a financial legacy whether it comes in the form of shares or funds set aside for post-secondary education; and
• as part of an Investment Advisor’s investment options, offering access to a professionally managed portfolio of short-term, residential mortgages.

Leading From the Front ​

Our CEO, Gavin Marshall, leads by example, making his company (Magenta Capital Corporation) a place where ‘Your Tomorrow Matters’ is more than a slogan. In his own words, “We all want to build a better world. To do so is how we transcend today and touch the tomorrows we shall never see.”  Our CEO is someone who would not have been able to attend post-secondary education without the grants in place at the time. Therefore, the cause of access to higher education has always been close to Gavin’s heart. Gavin is:

• the leader of the Campaign for Momentous Change at Trent University (TU);
• has been an avid volunteer for many years serving as the inaugural chairperson of Trent’s Philanthropic Advisory Committee; and
• a member of the Advancement Board of Governors External Committee.

Marshall has lent his philanthropic support to several University funds and initiatives, including the Student Centre, an International Nursing Placement, and a Philanthropic Fellowship position.

Magenta’s Inaugural Purpose Day​

On June 12^th and 13^th, we participated in our inaugural Purpose Day- a day where Magenta facilitated our employees’ ability to volunteer in Ottawa and Toronto, the two cities our offices call home. For our first year, we stepped up in support of our local food banks: both the Ottawa Food Bank as well as Toronto’s Daily Bread. In Ottawa, we assisted with bringing in the summer harvest at the community farm, which will help stock the bank’s shelves with fresh produce, while in Toronto we sorted donations for distribution throughout the Greater Toronto Area. We look forward to using Purpose Day to explore future opportunities to engage with and uplift the communities we work in for many years to come!

Our Trajectory​

Magenta Capital Corporation will be participating in this coming GivingTuesday on December 3, 2024. Canada Helps created GivingTuesday in 2012. Canada Helps is Canada’s foremost online destination for connecting charities to donors. It started as a simple idea: a day that encourages people to do good. The idea caught on and has grown around the world, inspiring hundreds of millions of people to give, collaborate, and celebrate generosity, with over 50 million dollars donated last year alone.

Every generation has believed in tomorrow. They wanted to build a better tomorrow for themselves and especially for their children. That’s the Magenta story. That’s why it’s important that Magenta gives back. Our team is committed to making meaningful contributions and aspiring to do more for our customers and our communities.

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, Margo Pratt, joined us in 2002, Magenta has empowered its team with 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. Margo 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 who are women by continuing to sponsor the 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 advisors 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.

Knock, Knock? No Doc!

At Magenta, we know there are many reasons why clients might require equity-based mortgage products. For some, unexpected challenges such as the COVID-19 pandemic may have left a mark on their credit or a gap in their tax filings that make applying for traditional mortgages difficult, regardless of their current assets and income. Others might simply have an income that’s difficult to verify, whether because they are self-employed, or their income is from a separation or bereavement, rather than employment. With these challenges in mind, let’s explore how Magenta’s No Doc mortgages can be a game-changer for alternative borrowers who fall just outside of traditional lending criteria.

Business For Self

Magenta offers No Doc mortgages tailored to alternative borrowers whose circumstances may not be best served by other 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 will lack the verifiable income needed to qualify for a bank loan. But with Magenta’s No Doc mortgages, that borrower would only need to provide proof of ownership of a marketable home in a high-quality location to apply for a No Doc mortgage with up to 75% loan-to-value (LTV).

Rentals

Consider also the self-employed property investor hoping to get a mortgage on a rental property to free up the capital to renovate their other projects. Due to the fluctuating nature of their cash flow, they may lack the evidence to prove their ability to repay a loan, despite their actual financial capacity being more than sufficient. With a Magenta No Doc Mortgage for Rental Properties, not only is there a 100% offset on rental income with no maximum number of doors, but there is also 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.

Our solutions accommodate your alternative borrower clients by placing the burden of proof on the quality of the property to be mortgaged. Keep reading to find out why you shouldn’t knock no doc:

1. Smaller Monthly Payments: Magenta offers 50-year amortization or interest-only payments. This balances our rates in favour of smaller monthly payments, passing the benefits on to your client’s cash flow.
2. New Longer Terms: Magenta is proud to have recently added 2-year terms as an option, in addition to our traditional 1-year term offerings.
3. 24-Hour Quick Closes: Has a borrower’s lending institution option fallen through? Our team will put in the work to help you meet your client’s deadline.
4. Capitalized Fees: We capitalize lender fees and broker compensation. This means the cost is added to the client’s principal and spread over the life of the mortgage.

 
See our selection of no-doc mortgages for yourself- all funded this year:

No Doc Mortgages are available in urban, small centre and rural locations throughout our lending areas. Please view our interactive 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.

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.

The Canadian Federal Budget 2024 and You: Navigating the New Economic Landscape 

The Canadian Federal Budget 2024 has arrived, bringing a host of new policies, tax adjustments, and funding allocations aimed at addressing the nation’s economic opportunities and challenges. In this article, we break down the key elements of the budget to help you understand its implications, especially as they pertain to Magenta investors.

Government policies can often be overwhelming, filled with complex details and a laundry list of exemptions and policies. It can be challenging at times to find what is and is not relevant to your day-to-day life. Our summary focuses on the most relevant points to make it easier for you to grasp what matters most to your financial decisions. Before making important financial decisions, use this article as a starting point to better understand the budget and to engage in informed discussions with your financial advisors.

Canadian Federal Budget Changes to the Capital Gains Tax

To reduce the appeal of real estate as a class of speculative asset, the federal government will be increasing the capital gains tax on June 25th with a view toward driving down the cost of housing. To break this down further, whenever you sell an asset or investment for more than you paid for it, that difference is a capital gain. Conversely, when you sell an asset for less than you paid for it, this is a capital loss. These assets or investments could take the form of:

• stocks and bonds;
• shares in a mutual fund; or
• physical property (with the notable exception of gains from the sale of your primary residence), to name a few.

As an individual, the changes coming into effect on June 25th only apply if you stand to make more than $250,000 in a single year from capital gains (after taking into consideration capital losses)- up to that point, you will still pay the current capital gains tax of 50%. It is only for capital gains over $250,000 that the 66.67% rate comes into effect. On the other hand, all capital gains made by a corporation or trust will be taxed at the new rate of 66.67%.

Managing Your Tax Burden

You can take many steps to manage your finances when it relates to the 66.67% rate. For instance, income earned and funds withdrawn from a Tax-free Savings Account (TFSA) are not subject to the capital gains tax but do have strict annual contribution limits. Capital gains income placed in a Registered Retirement Savings Plan (RRSP) is not taxed until the funds are withdrawn, at which point they are taxed at your marginal tax rate. Your Magenta shares are both TFSA and RRSP eligible.

The federal government taxes based on your net capital gains, rather than your gross capital gains. Knowing when to sell an underperforming asset or investment for less than you paid for it (thus creating a capital loss) can be a great long-term strategy to keep your annual capital gains within a favourable tax bracket. This provided that the mitigation in potential additional taxes is greater than the immediate loss.

Capital gains related to the sale of qualified small business corporation shares or qualified farm or fishing property are considered tax-exempt up to a limit of one’s lifetime capital gains exemption (LCGE). As a Canadian, your LCGE will increase from $1,016,836 to $1.25 million on June 25th, alleviating capital gains taxation for those specific investment classes.

Looking Ahead

As a Canadian, your marginal effective tax rate (METR) is 14.5%, which is the lowest among all G7 counties. The international Organisation for Economic Co-operation and Development (OECD) calculates your METR. This calculation takes your federal and provincial income tax rates and combines them with the effective tax rate from government benefits, credits and tax deductions that are dependent on your income.

Canada’s inflation rate has decreased from 8.1% in June 2022 to 2.8% in February 2024. The introduction of the Canadian Entrepreneurs’ Incentive, offering a lower capital gains tax rate of 33.3% up to $2 million in lifetime capital gains from selling small business shares, positions Canada as an attractive destination for business growth and investment.

There have been many changes to the Canadian Mortgage Charter, namely:

• new provisions that allow for 30-year amortizations for first-time home buyers purchasing newly constructed homes; and
• expanded access to Halal mortgages among other alternative financing options.

This will allow younger Canadians and Muslim Canadians to participate in the housing market like never before- adding two untapped demographics of borrowers to Magenta’s diverse portfolio.

For more information on the federal budget, please visit the Government of Canada website.

For more information on investing in Magenta shares, please reach out to us.

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 writers’ current or former employers. This article serves purely informational purposes, and the writers have made efforts to verify the accuracy of the information and analysis. The writers take full responsibility for any opinions, forecasts, or predictions made. They do not guarantee the precision or completeness of the document’s contents. This document does not offer professional or investment advice. The writers will not be liable for any consequences resulting from reliance on this piece. Readers should consult with a certified expert before making any financial decisions.

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.

Unlocking the Power of an RESP

The Essence of RESPs: Securing Educational Futures

A Registered Education Savings Plan (RESP) is a tax-advantaged investment vehicle designed to assist families in funding their children’s post-secondary education. This long-term savings strategy empowers parents, grandparents, and other contributors to proactively plan and invest in higher education, be it at trade schools, colleges, universities, or apprenticeship programs.

Recognizing the significance of accessible education, the Canadian government provides incentives for RESP contributions through grants, making these plans beneficial for families across socioeconomic spectrums. By leveraging the power of compound growth and government assistance, RESPs are a tool for financing educational aspirations and may help reduce the potential burden of student debt.

There are a few things to consider when informing yourself about RESPs:

1. The type of RESP
2. Personal contributions and government grants

In this article, we will discuss the types of registered education savings plans as well as government grants. Be sure to monitor Magenta’s social media channels for our next blog on strategies and tailoring your investment.

The Type of RESP

Individual RESPs

Characterized by their simplicity, individual RESPs allow anyone to open and contribute to an RESP for a designated beneficiary. These plans offer a straightforward path to educational savings, making them an accessible choice for many families. You cannot have more than one beneficiary on an individual RESP.

Family RESPs

Designed to accommodate multiple beneficiaries within the same family, Family RESPs enable parents, grandparents, and siblings to collectively contribute towards the educational pursuits of their related children or grandchildren. This plan type fosters a collaborative approach to investing in the futures of loved ones. However, while you can have multiple beneficiaries on this plan, only the subscriber can make the deposit.

Group RESPs

Group RESPs allow a collective of individuals to pool their resources and contribute towards a single beneficiary’s education. This arrangement transcends familial ties, fostering a sense of community and shared responsibility in nurturing the academic aspirations of the next generation. Each group plan is different and has its own rules.

Personal Contributions and Government Grants

At the heart of an RESP’s effectiveness lies a strategic combination of personal contributions and government incentives, working in tandem to maximize the growth potential of your educational savings.

Personal Contributions

While RESP contributions are not tax-deductible, they serve as the foundation upon which your child’s educational fund will be built. Contributors can allocate funds annually, subject to a lifetime maximum of $50,000 per beneficiary. To optimize government assistance, it is advisable to contribute at least $2,500 per beneficiary each year. Reaching this threshold unlocks the maximum annual grant entitlement. Subscribers can go back a year to invest the $2,500 per year for their beneficiaries if they miss it. Contact the Canada Education Savings Program (CESG) at 1-888-276-3624  for more information to find out your contribution amount.

Government Grants and Bonds

The Canadian Education Savings Grant (CESG) is a powerful incentive that matches a percentage of your contributions. For children under 18, the government contributes 20% of the first $2,500 contributed annually, up to a maximum of $500 per beneficiary per year. This grant can accumulate a lifetime maximum of $7,200 per beneficiary, providing a substantial boost to your educational savings.

Moreover, low and middle-income families may be eligible for the Additional CESG (A-CESG), which can add an extra 10% or 20% to the first $500 contributed annually, further amplifying the impact of your contributions.

Furthermore, for families facing financial constraints, the Canada Learning Bond (CLB) offers a non-repayable grant of up to $2,000 for eligible beneficiaries, providing a head start on their educational journey.

Investment Growth

Once contributions and government grants are deposited into the RESP, they are invested in various financial instruments, such as mutual funds, stocks, bonds, and guaranteed investment certificates (GICs) etc. This strategic investment approach harnesses the power of compound growth, allowing your educational savings to accumulate markedly over time. Potentially, this could yield substantial returns by the time your child is ready to pursue their post-secondary aspirations.

What’s to come for RESPs?

Finally, according to the new federal budget, from 2029 onward, parents may be required to open RESPs for newborns. Stay tuned in the coming months for more information on RESPs. For more information on the CESG visit their website or call 1-888-276-3624.

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 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. Similarly, ensure you 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. 

Investing with Magenta offers:  

• Regular income  
• Liquidity and
• Flexibility  

Magenta has delivered strong returns and a reliable income to our investors. We safeguard capital by applying a risk-mitigated portfolio strategy. We hand-pick our portfolio of residential, primarily first mortgages located exclusively in selected Ontario markets.

Like this blog? For more content like this, 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.