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"It is a funny thing about life; if you refuse to accept anything but the best, you very often get it." (W. Somerset Maugham, English playwright and novelist, 1874-1965)

The best and lowest interest rates for mortgages and equity loans are upon us, and it wouldn't surprise me if they go even lower.

The latest 15-year Fixed Rate Mortgage Average in the United States (as of Oct.4, 2012) has fallen to a new, all-time low as the following chart illustrates clearly.

Graph of 15-Year Fixed Rate Mortgage Average in the United States
(Click to enlarge)

If you can qualify, there has never been a better time to borrow money to buy a home or refinance an existing mortgage then right now!

Buying a house to live in or to use as a rental makes good financial sense in almost all regions of the country. By borrowing all that you can qualify for you're using leverage to control the future growth of your home's valuation.

As inflation picks up in the years to come the replacement value of that house will go up and so will the value of your leveraged investment. For instance, if you invest in a house with a current market value of $300,000, and you only have to put up $60,000 (and you mortgage the rest), you could easily double your money.

How? If in the next few years the market value moves up to say $385,000 and you decide to sell, even after paying 6% realtor fees you'll get back your $60,000 deposit plus earn a capital gain of $60,000. That's a 100% return on your capital investment!

If you don't have $60,000 to plunk down on a house or better yet, a duplex, don't despair. If you invest what you have carefully and patiently you'll eventually get there, thanks to "The Rule of 72."

The rule helps us to find the number of years needed to double our money based on a given interest rate or rate-of return. You take that rate and divide it into 72.

For example, if you want to know how long it will take to double your money at an eight percent annual interest rate, divide 8 into 72 and you'll find that it'll take 9 years. If you choose an investment that pays interest, dividends and has a positive Return-on-Equity (ROE), you're even more likely to double your money in a reasonable amount of time.

Here are Some Stocks With Good ROE and Total Return Prospects

If you want to invest in real estate without having to fork over a large amount of your investment capital you might want to consider Two Harbors Investment Corp. (TWO). TWO operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities, residential mortgage loans, residential real properties, and other financial assets.

Their current dividend yield is an amazing 11.90%, which represents a payout ratio of 133%. In a recent conference call that can be found at their user-friendly website the President of TWO told investors,"Two Harbors has invested approximately $150 million in its portfolio of single-family residential properties of roughly 1,370 homes."

So TWO is an indirect way of taking advantage of record low interest rates for financing the purchase of houses and single-family residential properties. With their 84% profit margin (trailing-twelve-months) and an almost 83% operating margin, I expect funds-from-operations and revenue growth to soar in the year ahead.

TWO will host a 3-hour long live webcast of its Analyst & Investor Day from the New York Stock Exchange on Wednesday, October 10, 2012. The details of this events can be found by clicking here, and should be an event that all investors and potential investors won't want to miss.

With its ROE at almost 12% and its almost 12% dividend, TWO meets my criteria as an investment to be accumulating that should directly benefit from low interest rates and the Fed's massive QE3 monetary policies.

Another real estate oriented company is HCP (HCP) a REIT that primarily focuses on the healthcare industry and offers a 4.4% dividend and a ROE of 6.75%.

Healthcare REITs like HCP and Health Care REIT (HCN) have already moved up strongly in the past year as the chart below illustrates.

Chart forHCP, Inc. (<a href=

My recommendation is to accumulate shares of either or both only after an inevitable price correction. If shares correct 10% I'd feel more confident about being a buyer.

Recently I wrote an article that makes a strong argument for buying two stocks that are already benefiting from the current U.S. economic malaise. They offer the kinds of merchandise that people use to decorate and replenish their homes with a plethora of discounted goods.

Family Dollar Stores (FDO) and Dollar General (DG) are prospering. Of the two I strongly believe that DG is the better investment right now. I encourage you to look at the above referenced story for more details.

Unrelated to housing are stocks like Marathon Oil Company (MRO), a worldwide energy company that offers attractive valuations, a decent dividend and has a trailing-twelve-months ROE of 10.23%. Its trailing PE is still below 12 and its forward PE is a low 8.89.

With its 2.30% dividend and the analysts' 1-year target consensus of 17% from the closing price on Friday Oct. 5th of $29.64, a 20% total return within twelve months seems achievable.

Petroleum refining margins must be pretty tight for fuel prices to have spiked over 10% in most parts of the U.S. over the past week. This should benefit our next stock idea which operates as an independent petroleum refining and marketing company.

Valero Energy (VLO) also has over a 10% ROE, a 2.2% dividend yield, and an attractive forward PE ratio of only 6.62. Its next earnings report will be released on Oct.30th. In the last quarter it grew its year-over-year quarterly earnings by almost 12%.

The analysts' 1-year target consensus price of $38.89 is a reasonable target that may offer over 22% upside from the current price of around $31.75. Add in the dividend and your 12-month total return potential with VLO may be as high as 25%.

Runner-ups to the stocks already mentioned include Exelon Corp. (EXC), the powerful multi-state utility with a strong 5.8% dividend and an almost 10% ROE. Millions of houses in the Northeast and upper Midwest depend on EXC for their electricity.

So if you can, consider buying a house for an investment while interest rates are at all-time lows. If you can get enough rent to break even or create some positive monthly cash-flow that's even better.

If you don't have the money or the inclination to do that, consider stocks that can offer some exponential growth rates and exceptional total return potential such as MRO, VLO,TWO and DG.

Source: Buy Houses Or Buy These Stocks