Mortgage-Backed Securities

Mortgage-Backed Securities (MBS) are financial products created by pooling together many individual home loans. Investors buy these securities, and their returns come from the mortgage payments made by homeowners. Essentially, MBS allows investors to earn money from the real estate market without directly owning properties. They are traded like stocks, and their value can fluctuate based on interest rates and housing market conditions. While MBS can provide steady income, they also carry risks, as defaults on home loans can impact the returns for investors.