Mortgage REIT

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Definition of 'Mortgage REIT'

A mortgage REIT, or real estate investment trust, is a type of investment that allows individuals to invest in real estate debt, such as mortgages and mortgage-backed securities. Mortgage REITs invest in real estate debt, rather than equity, and generate revenue primarily through the interest income from the mortgages they own or the mortgage-backed securities they invest in.

Mortgage REITs can invest in a range of mortgage-related assets, including residential and commercial mortgages, mortgage-backed securities, and other real estate-related debt. Mortgage REITs generally do not own physical properties but rather focus on the income-generating potential of the underlying mortgage assets.

Mortgage REITs may provide higher yields than other types of REITs, as they tend to have higher levels of leverage and invest in higher-yielding assets. However, they also come with risks, such as interest rate fluctuations, credit risk, and prepayment risk.

Investors interested in mortgage REITs should carefully research the options available and consult with a financial advisor to determine if this type of investment is appropriate for their goals and risk tolerance.

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