Secondary Mortgage Market
Market where mortgage loans can be sold to investors. The availability of funds for financing real estate is affected by economic conditions, both local and national. The result is that at certain times or in certain geographic location little or no capital is available for mortgages' consequently, few if any loans are made. From the viewpoint of the lender, another problem is that real estate loans can be highly illiquid; thus, the supplier of funds can have a difficult time converting loans into cash. For these reasons, the need exists for same means by which a lender can sell a loan prior to its maturity date. The secondary mortgage market attempts to meet these needs. Capital can be made available during times of tight money and at capital-deficit locations. By selling mortgages in the secondary mortgage market, a lender can convert existing mortgages into cash which in turn be used to fund new mortgages. Likewise, an investor in the secondary market can buy existing mortgages, pay the seller a small servicing fee, and avoid the time and expense of originating and servicing the loans.
Popular Real Estate Terms
Wondering what is the baseboard definition? Baseboard is a detail piece placed at the spot where the floor meets the wall. Typically made out of wood, vinyl or PVC plastic, the baseboard ...
one having physical existence and a life exceeding one year. It is not kept for resale in the ordinary course of business. An example is a building. ...
Lienholder's statement as to the unpaid balance on a trust deed note. ...
Obtaining money and/or property from a deceased person whether by will or not. ...
Modification made by a municipality to the zoning of a locality. A change in zoning typically has to be requested and approved by a zoning commission and then the legislative body. It can ...
Fixed interest rate loan in which the payments are made every two weeks, but the payment is one half the amount of a regular monthly fixed-rate mortgage with the same amortization schedule. ...
Used to indicate what is included in a monthly payment on rental property. If the payment includes only principal and interest, property taxes, and hazard insurance would make the total ...
In taxation, the excess of total long-term gains minus total long-term losses on the sale of real estate. Long-term classification is for real estate held one year or more. This is reported ...
Sponsor sells interest to real estate investors in one property only. The total amount received from the equity investors is used by the sponsor to buy the property for the partnership. ...
Have a question or comment?
We're here to help.