Home Mortgage Loans As Cautious Investments

by David Jenyns on March 19, 2008

Buildings and loan associations insured by the government pay up to 4.6 percent return, sometimes more if the savings are left in the association for a period of time. This rate is about .6 of 1 per cent higher than that of the highest rate savings banks in the country, and the building and loan associations provide comparable safety and liquidity.

About 25 million Americans deposit in insured building and loan associations, and the total assets of these associations amounted in 1959 to $63,472,000,000. The building and loan association is the chief outlet for the funds of the small investor and the medium and small income earner for home mortgage loans. The growth in a fund deposited in an insured building and loan association over a period of years is surprising. As an example, let’s look at loans that have been prepared at various rates of interest obtainable in the year 1962, and interest has been compounded semiannually. Over a period of time the difference between 3.5 percent and 4 percent is great. This difference amounts to over 20 percent of your original investment of $10,000.

Because a slightly higher rate means so much over a period of years, it is best to seek out the highest paying insured building and loan associations for home mortgage loans.

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