If you keep up with the times, then you’d notice that people are subscribing more to trust deeds these days. It wouldn’t be a surprise, though, if you wonder what a trust deed really is.
Trust deed is merely a mortgage that one sells to a private company. It is also known as a privately-held mortgage or a home equity loan, which means that your mortgage is paid by a private company as part of a loan. You can probably tell that this type of loan is guaranteed by the equity of your home.
You’d wonder now why people would prefer this type of loan when it means that you have to risk losing your home if you don’t make the payments required on time. That is because it is not a simple loan; most people now think of a trust deed as an investment vehicle. With a trust deed, you can settle mortgages without having to spend a single penny every month. So, now that you’re interested, how d you exactly avail of a trust deed?
It is actually very simple. Like mentioned earlier, you should only sell off your mortgage with a private firm or a trust deed company. Of course, you should have a mortgage in place already in order to this. Once you sell off your mortgage, you will get a lump sum of cash as payment for your sold mortgage. Now what happens next?
This is where it gets better. You see, you are not governed by any provision in your loan as to where you can spend the lump sum of cash you get. You can buy a car, or use it to pay off the remaining payments in your mortgage, or use it to pay off any other debt. In return, of course, you should pay off the loan. However, in the case of a trust deed, you can use the lump sum to make an investment.
Trust deeds are investment vehicles. You can invest in a trust deed in order to make enough money and perhaps even achieve financial freedom. This means that you become a lender yourself, and do the same thing like issuing loans that are secured by real estate property like you have done. This offers high returns every month, much higher than banks and other financial institutions can. This way, you get to earn every month and use it to pay off your debts without spending a single penny every month or every quarter.