The mortgage REIT is a type of investment that allows you to purchase into a fund that owns a large number of mortgages. This type of investment can provide you with several advantages as an investor. The term mortgage REIT stands for mortgage real estate investment trust. With this type of trust, the manager invests in hundreds or thousands of different mortgages. This is much like a mutual fund that invests in mortgages. 

How It Works

The companies that issue this type of security make their money by borrowing on short-term securities and then lending long-term mortgages. The difference between the two interest rates is what they end up making. With this type of investment, the company has to pay out 90 percent of the profits that they make over the course of the year to investors.

How to Invest

In order to invest in this type of investment, you simply need to purchase it through a brokerage account. You can buy or sell shares of this type of investment just like you would with a share of stock. This makes them a very liquid type of investment to get involved with.

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