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To: Browns Ultra Fan

“mortgage current coupon rate”

Not at all clear

who pays the interest? Who gets the interest?


8 posted on 05/23/2022 11:31:31 AM PDT by Brian Griffin
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To: Brian Griffin

And to further clarify — the Mortgage RATE is the coupon on the home mortgage, 4%, 3%, etc... I borrow $300k for a home, they charge me that every year on the balance. The homeowner PAYS interest.

That mortgage and hundreds of others are put into a pool and fractionalized into bonds secured by the mortgages, becoming Mortgage Backed Securities that can be traded like a stock. When you buy a MBS, you are (usually) wanting to get paid more than you invested. The investor RECEIVES interest.


17 posted on 05/23/2022 12:03:33 PM PDT by L,TOWM (An upraised middle finger is my virtue signal.)
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