Mortgage Backed Securities
- Topics:
- Investment and Capital Markets
- Source:
- Investopedia
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Overview: This tutorial summarizes and gives information about Mortgage Backed Securities. Mortgage Backed Securities are an undiscovered gem. While these securities are primarily used to provide safe income there is also the opportunity to get some capital appreciation as interest rates fall. Principal and interest from the individual mortgages are used to pay principal and interest on the MBS. When you invest in a Mortgage Backed Security you are lending money to a home buyer or business. MBS are a way for small regional banks to give mortgages to their customers without having to worry if they have the assets to cover the loan.
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