Mortgage trusts are appropriate for investors seeking higher yields and interest income compared to money market and fixed income investments, and for those who are seeking a consistent stream of income. Most trusts are suitable for investors with a low tolerance for risk.
What to consider when investing in a mortgage trust?
Before investing in a mortgage fund, the following fund information should be reviewed and evaluated:
What is the maximum loan value on any one property?
What is the maximum percentage or dollar value that can be invested in any one mortgage?
What are the lending guidelines for commercial and industrial mortgages?
Where are the mortgages located?
Do the managers have personal equity in the trust?
How experienced are the managers in originating mortgages?
These details are published in the fund’s Offering Memorandum.