This type of arrangement is usually cheaper in the short term (only the interest has to be paid on a monthly basis), but higher risk in the long run. This is because there is no guarantee that the investment will be sufficient to cover the balance, at the time of maturity.
Investment-backed home morgages do offer some advantages, however, due to the fact that they are a cheaper way for buyers to take advantage of low morgage rates in an improving real estate market.
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