Purchase Solution

Advantages/Disadvanages to Mortgage Bonds

Not what you're looking for?

Ask Custom Question

What are the advantages to investing in mortgage bonds? What are the disadvantages? Would you personally invest in mortgage bonds? What kind would you pick and why?

What are some of the key variables affecting interest rates to watch in the upcoming months?

Purchase this Solution
Solution Summary

The solution goes into a discussion of mortgage bonds. It starts with a thorough description of what one is, and then provides some brief comments designed to get the student to think critically about what the advantages or disadvantages are over time, and what factors influence interest rates.

Solution Preview

I found the following:

"Mortgage-backed securities, also called mortgage-backed bonds, are pools of real estate mortgages that have been securitized by the issuer, and sold to investors. Based on securitized mortgage contracts, known as pooling and servicing agreements, these mortgage pools consist of particular classes of mortgages in regard to interest rate, maturity, and type of property. Usually, the bank that originated the mortgage also services the loan, for which it continues to deduct a small ...

Purchase this Solution
Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

View More Free Quizzes
Related BrainMass Solutions

  • Asset & Capital Management: Working capital, financing policy, debt vs equity financing

    Name two types of long-term debt financing and list the relative advantages and disadvantages (to the borrower) of each. Two types of long term debt financing are: i) bonds /debentures: This one of the types of long term debt financing.

  • Bond Financing

    company would chose to issues bonds, advantages of bond financing and the challenges of this company faces regarding bond financing.

  • What are the advantages and disadvantages of using bonds as opposed to stocks in order to raise money?

    Mortgage Bonds acts as an easy tool to raise money in the short term since investor are more secured by way of lien in the assets of the company. 10.similar to mortgage bonds Income bonds are more attractive to investor as they know it gives fixed

  • Finance Questions

    Does the company's balance sheet change at the point the bondholders convert their bonds to common stock? Explain? e What are the advantages to the investor in buying convertible bonds instead of the stock itself?

  • Financial reporting - benchmarking, annual returns and more

    Advantages: Some of the advantages of benchmarking are that it enables companies to outperform, it also opens business people's mind to new ideas and to perform changes.

  • MCQs on Bonds

    Higher the percentage of mortgage bonds lesser the assets to be shared between these bonds and therefore riskier the mortgage bonds and therefore the costs on mortgage bonds would increase.

  • Holiday Company issued its 9%, 25-year mortgage bonds in the

    410485 Holiday Company issued its 9%, 25-year mortgage bonds in the principal amount of $3,000,000 on January 2, 1996, at a discount of $150,000, which it proceeded to amortize by charges to expense over the life of the issue on a straight-line basis.

  • What are the different types of bonds?

    Mortgage Bonds - A bond backed by fixed assets. First mortgage bonds are senior in priority to claims of second mortgage bonds. 2. Debentures - A long-term bond that is not secured by a mortgage on specific property. 3.

  • Mortgage Note Records

    Prepare the entry to record the mortgage loan on December 31, 2012, and the first installment payment. 2. Pas Company issued $1,000,000 of bonds on January 1, 2012.

View More Related Solutions