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Simple English definitions for legal terms
primary mortgage market
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A quick definition of primary mortgage market:
The primary mortgage market is where people go to get a new mortgage loan. This is where lenders offer loans to people who want to buy a home. The secondary mortgage market is where existing mortgages are bought and sold. This is usually done in large packages.
A more thorough explanation:
The primary mortgage market is where new mortgages are originated. This is where borrowers go to obtain a mortgage loan to purchase a home or refinance an existing mortgage. The primary mortgage market is made up of lenders such as banks, credit unions, and mortgage companies.
For example, if you want to buy a house, you would go to a lender in the primary mortgage market to apply for a mortgage loan. The lender will evaluate your creditworthiness, income, and other factors to determine if you qualify for a loan and how much you can borrow.
The primary mortgage market is important because it provides the initial funding for mortgages. Once a mortgage is originated, it can be sold in the secondary mortgage market to investors such as Fannie Mae and Freddie Mac. This allows lenders to free up capital to make more loans.
Overall, the primary mortgage market is a crucial part of the housing market and the economy as a whole. It provides the financing that allows people to buy homes and invest in real estate.