WHAT IS A "SECONDARY MARKET"?

Secondary markets do not lend money directly to borrowers. Instead, they provide funding to the primary mortgage and money institutions such as savings and loans, commercial banks, and credit unions. They do so by purchasing the loans these lenders have made, guaranteeing them, and selling them to investors.

The money generated by this transaction is then used to purchase more loans. By purchasing the loans from primary lenders, the secondary markets ensure primary mortgage and money institutions have the funds to continue to lend to home buyers and do so at reasonable rates.



MORTGAGE Q&As

What is a Loan that Originated in a Portfolio?
What is the "Secondary Market"?
What Kind of Documents are Required for a Loan?
What is a Credit Check and Who Performs Them?
What Does a Lender Have to Disclose to You by Law?
What is PITI?
Why Do I Need Private Mortgage Insurance (PMI)?
Where Do I Get Private Mortgage Insurance (PMI)?
What is an Interest-Only Loan?
What are the Limits on FHA Loans?
What Is Seller Financing?
What are the Primary Institutions of Money and Mortgages?
What is the Advantage of Using a Broker for my Home Loan?

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Type of Loan

Mortgage Refinance
Home Equity Loan or Line
Debt Consolidation
New Home Loan

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