What are the advantages to investing in mortgage bonds

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Question - Mortgage Bonds - Lending institutions will take mortgages and package them together and then sell them to investors. Banks can get the loans off the books and re-lend their money to other home buyers, and investors get a safe investment that pays higher than many other similar investments.

What are the advantages to investing in mortgage bonds? What are the disadvantages? Would you personally invest in mortgage bonds? What kind would you pick and why? Would you consider mortgage bonds to be risky? Or, should they be included within one's portfolio as a way to diversify?

Reference no: EM133244588

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