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
A fiduciary intermingling a clients funds or one who is entrusted with funds and groups them with those of his own. This practice is considered a breach of a fiduciary relationship and a ...
Implied assurance from a landlord to a prospective tenant that an apartment is safe and void of health problems. ...
A clearly stated notice that an owner or operator will not assume responsibility for an inherent risk. For example, at a parking garage, a large notice of nonresponsability clearly states ...
Charge by the lender to keep credit available to the potential borrower. Once the loan is made, interest is charged on the amount borrowed. Real estate businesses often need money available ...
Property tax rate whereby each mill is $1 of tax assessment per $1,000 of assessed property value. For example, a house in Los Alamitos is assessed at $200,000 and the millage rate is 10 ...
A Vanilla Shell - also known as a Vanilla box, white box or whiteboxing – is something very common in commercial real estate and growingly common in residential real estate. In many ...
Welcome to the world of magical yet perplexing real estate! Undeniably, there's a lot to learn, but we're here to explain miscellaneous terminology so that you can make educated decisions. ...
The modified accrual method is defined as an alternative accounting method that combines the two basic methods of accounting, the accrual method and the cash method. While the accrual ...
Recognizes profit on a long-term construction contract as it is earned gradually during the construction period. This approach is preferred over the completed contract method because it ...
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