One of the most frequently broached topics in the financial news is the fact that more and more people seem to be lacking enough money in their retirement fund for their days after they stop working. While personal debt appears to be on the decline, personal saving does not appear to be heading up quickly enough for people to have the security they need when they want to retire.

If you’re not in your 20s or 30s anymore, you may not want as many of those high-risk investments in your portfolio. As you cross the threshold of middle age, finding some additional security in your investments is definitely a priority. However, you don’t want to settle for the rock-bottom interest rates that you get from savings accounts and certificates of deposit. It’s nice to have a few of those things sitting in the back of your account, but those rates barely keep up with the cost of living, so you’re really not gaining much at all by having those things there.

So how can you keep an elevated level of return in your portfolio while trimming some risk at the same time? One avenue that is becoming increasingly popular is funding private financing mortgages. Whether you want to fund one mortgage, a handful of mortgages, or hundreds of mortgages, there are ways for you to gain access to the returns that come at the high end of the real estate market while assuming a level of risk that is not much higher than a basic savings account at a bank.

Here’s how it works. If you have enough money in the bank to finance an entire mortgage by yourself, then you could become a private lender. Amansad Financial works with clients on both ends of this transaction on a regular basis, matching potential borrowers and lenders. If you have, say, $300,000 to lend, then Amansad Financial’s private mortgage staff would find a client looking to borrow that amount or less to complete a private financing mortgage. If the amount is higher, then Amansad Financial might offer you the chance to pair with another investor and fund it together. Amansad Financial screens potential borrowers rigorously, only identifying those that are likely to succeed for approval.

You lend the money for a term of perhaps one to two years, and if you want to give the borrower the option to renew, that is up to you. You’ll bring in an interest rate that is significantly higher than what banks are getting for mortgages these days. After all, you’re a private lender taking on significantly more risk than a bank would be, because you’re dealing with a borrower who couldn’t qualify for bank financing. At the end of the term, you either agree to renew or get all of your money back in a balloon payment, and you keep the interest as well.

How can you get in on hundreds of mortgages at once? Some investment companies sell access to mortgage investment funds, which buy up mortgages by the hundreds and administer them. Investors send them money, because having so many mortgages in one fund makes the effect of a default here or there much less significant than the risk of funding just one mortgage.

If you have questions about investing in the real estate market, call Amansad Financial today, and we will share our latest opportunities with you.

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