Investing in collateralized mortgage loans is more profitable and risk-free with guaranteed annual earnings of 8 percent and as much as 13 percent paid on a monthly basis. On the other hand, investment in regular stock market offerings such as stocks, bonds and annuities never yield earnings higher than 5 percent annually and are usually paid quarterly or even twice a year.
Investing in collateralized mortgage loans is more profitable and risk-free with guaranteed annual earnings of 8 percent and as much as 13 percent paid on a monthly basis. On the other hand, investment in regular stock market offerings such as stocks, bonds and annuities never yield earnings higher than 5 percent annually and are usually paid quarterly or even twice a year.
Interest earnings from shares of stock and bonds also come only when the companies involved are in such good financial position to declare a cash dividend for shareholders. Thus, such investments are highly vulnerable to market volatilities. In order to protect their money, the investors should be well-informed and on their toes, ready to buy and sell at the appropriate time.
There is no need for this kind of vigilance in private mortgage investment because interest earnings are stable and recession-proof. Private mortgage is a debt obligation secured with liquid assets that yields a regular and predictable stream of income to the investor. Since it is a mortgage lien, the investment enjoys all the security, protections and recourse that such a financial instrument enjoys.
A mortgage lien is as secure as a land title that carries legal protections and rights. Although investments in mortgage loans generate handsome interest payments the money sunk into does not appreciate under any market conditions.
There is a floating rate set for mortgages which may goes up but never down. If the prime rate rises, the mortgage investment rate also increases, but if the prime rate goes down the initial mortgage investment rate never declines.
Going into private mortgage investment may be difficult for the uninitiated. But this can be easier with the right brokerage firms specializing in mortgage investment that makes owning a mortgage for private investor as simple as can be. They simply helps the investor purchase or fund a mortgage, and then the investors sits back and collect the monthly interest check. Private investors can invest anywhere from $50,000 to $150,000 and earn up to 13 percent annually.
With a firm handling your investment, they must allow you to diversify your portfolio to make your earnings more stable and recession-proof. They must have a finance counsellor available to help shape your decision.
All investments must provide as strong returns as exposure in private mortgages since few other investments have an asset like real estate as a “backstop” that provides ample protection against any downturns as in the stock market. But whether private mortgage investments are the best for your will depend upon your time frame, your risk and reward expectations and your anticipated need for liquidity.
Private mortgage is a debt obligation secured with liquid assets that yields a regular and predictable income stream to the investor with all the security, protections and recourse that a mortgage lien can provide. This type of mortgage does not typically provide any capital appreciation but do generate a steady stream of interest payments. Unlike stocks, the security is tangible and legal protections such as title insurance and many other unique rights and remedies ensure the enforceability of a mortgage lien.
