The perception of mortgages has certainly changed over time. In fact, the way we perceive loans in general has changed, too. At one time, most people would never have dreamed of buying anything with borrowed money, or even credit. Now, concepts such as interest rates, loans, mortgages, etc., are a very common part of our society and culture.
The reasons for this evolution are multi-faceted, but at the root of the growth in our borrowing and lending culture is a better understanding of the way money actually works. Indeed, people of all walks of life have learned that not only can you work for money, but money can work for you, too.
Why mortgages pay off
This principle is embedded in the very notion of interest rates, which simply constitute the price of borrowing and lending money. Instead of having cash stashed away in a mattress or the attic, doing nothing in the process, people have learned to either invest in a loan, or secure a loan, often for investment purposes. These principles form part of the fabric of our modern economic system, and is one of the reasons our society is so prosperous historically.
Even now, decades after a more sophisticated approach to loans and mortgages has taken shape, new trends emerge, and even smarter strategies towards mortgages and investing develop. For example, in today’s economic environment, high-net individuals are doing something we weren’t supposed to do all that long ago: they’re not paying off their mortgages.
In fact, what’s happening now is that individuals, including seniors, are deliberately delaying the paying off of their mortgages — as part of an investment strategy. Since interest rates are low, keeping a mortgage while investing the extra cash in other higher-yield investments, including mortgages or mortgage investment corporations (MICs) is turning out to be an example of wise investing, simply stated.
So mortgages can certainly form a major investment role in a wide range of portfolios. Being a mortgage borrower can help secure low-interest financing to invest in higher-interest options, which can also constitute some sort of mortgage investment alternative. It’s a fascinating aspect of our modern economy, isn’t it.
ASCEND MIC is a mortgage investment corporation that specializes in offering investors high returns at low risk in Canada’s mortgages market. Please contact us to learn more.