Many people that want to make a good investment on their savings choose a trust deed investment. Before you learn about a trust deed investment, you need to be knowledgeable in what a trust deed consists of. When an individual purchases a home, they borrow money to make the purchase. The loan transaction can go directly through a bank or lending institution or it can be handled with a deed of trust.
A deed of trust involved a beneficiary (lender), trustor (buyer) and trustee, which is usually a title company that holds the deed until the loan is paid. The trustee is the one that does all the dealing between the lender and the buyer.
A trust deed investment is when you purchase the deed of trust. The title company that owns the deed of trust takes care of all the important details. They give insurance that the title holder has first lien on the property and that there are not other judgments or liens on the property. Because the borrower is required to carry homeowner’s or fire insurance on the property, the title company ensures that the insurance is kept current.
The title company or lending institution take care of all appraisals on the property as well as making sure the property taxes are paid when they become due. All the important details are taken care of, making a trust deed investment easy and uncomplicated for you.
If you have a large savings that is collection interest each month, you’re probably happy and content that your money is making money. However, your savings, which may be drawing 4% interest, could be making much more money for you. When banks borrow money to lenders to purchase a home, they charge a much higher rate of interest than 4%. They often charge, 7%, 8% or even higher depending on the borrower’s credit scores. Why not earn some of that money yourself and make your retirement fund that much larger? You can do this if you make a trust deed investment.
When you make a trust deed investment, you are purchasing the trust deed as though you were the banker. You are the one lending the money to the borrower and, therefore, collecting the hefty interest checks the bank was collecting. Many lending institutions offer their customers trust deed investment opportunities. When the payments come through, the bank can either put the money directly into an account for you or send you the money collected. This is a great way to let your money do some work for you-bringing in a larger income each month.