What is the primary mortgage market? What is the secondary mortgage market? Is there a mortgage market guide? Here is the difference between primary mortgage markets and secondary mortgage markets.
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Primary vs Secondary Mortgage Market Article: https://www.carealtytraining.com/blogs/mortgage-markets-primary-secondary
In this video, Robert Rico breaks down the primary mortgage market and secondary mortgage market and how they differ. When your client is purchasing their new home, they will need to know the difference and how it affects them.
The primary mortgage market is where a mortgage loan lender qualifies the homebuyer who is borrowing the money. Here, they determine whether or not the borrower is a qualified candidate for the mortgage loan. They will ask important questions to learn more about the potential borrower.
Lenders have a stockpile of funds they use to invest in borrowers. They make money by charging a percentage, also called “points,” on the money borrowed. However, a lender can run out of money to loan to borrowers.
So, then what?
The secondary mortgage market is where mortgage loan lenders sell their loan notes to investors. These loan notes are the contracts that borrowers sign to solidify their loan agreement. Mortgage loan lenders can earn money by selling these contracts to large investors who will buy them.
When large investors buy up lender notes, they will receive the payments from the borrower. The loan lender will walk away with a lump sum of cash from their transaction to the investor. Therefore, loan lenders can continue to give money to future borrowers.
00:45 Primary Mortgage Market
02:09 What is the Primary Mortgage Market?
06:21 Secondary Mortgage Market
09:08 What is the Secondary Mortgage Market?
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Originally published at https://www.youtube.com/watch?v=GlXPmOALI2g