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THE ASPECTS OF THE MORTGAGE MARKETS INDUSTRY (Options that influence a…
THE ASPECTS OF THE MORTGAGE MARKETS INDUSTRY
A MORTGAGE
is a long-term loan secured by real estate
Options that influence a loan term
No one can buy the property and obtain clear title to it without paying off this lien
A down payment on the property is also required by the lender from the borrower to obtain a mortgage loan, it means that the borrower is to pay a portion of the purchase price
Collateral is one of the characteristics common to mortgage loans. It is the requirement that collateral, usually the real estate being financed, be pledged as security
Purchasing private mortgage insurance (PMI) is another way that lenders protect themselves against default of borrowers
Borrower qualification is a preliminary assessment by a lender of the amount it will lend to a potential homebuyer. Before granting a mortgage loan, the lender will determine whether the borrower qualifies for it
MORTGAGE MARKETS
THE PRIMARY MORTGAGE MARKET
is the market where borrowers and mortgage originators come together to negotiate terms and effectuate mortgage transactions
THE SECONDARY MORTGAGE MARKET
is the market where mortgage loans and servicing rights are bought and sold between mortgage originators, mortgage aggregators and investors
THE MORTGAGE INTEREST RATE
is the percent charged, or paid, for the use of money
LOAN TERMS
are conditions and requirements included in a loan agreement that specify the loan amount, term, interest rate, and other enforceable conditions agreed to by the borrower and the lender
A LOAN TERM
is a period over which a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term
MORTGAGE LOAN AMORTIZATION
is the schedule for how each monthly mortgage payment is allocated to interest on the loan and principal payment