What does the Primary Mortgage Market offer you?

Primary mortgage market includes a market where loans are initiated by lenders like commercial banks, savings and loan association, credit union or any mortgage company. The borrowers are expected to keep their property as security for the debt. Whether the borrower can avail the loan depends on his financial status including his credit rating.

The primary market comprises of lenders like mortgage bankers, portfolio lenders, direct lenders as well as wholesale lenders. The bankers originate loans and sell them to other investors. A portfolio lender, on the other hand, can sell the loan only after a year of its origination provided there is no late payment. But he is allowed to service the loan even after it is sold to investors. You can also approach a direct lender who provide loans on their own and can either be a banker or portfolio lender. Apart from these lenders there are banks, credit unions and savings and loan associations which provide mortgage loans and later on sell them.

In case you are unable to find a suitable lender, you can approach a mortgage broker. The broker assists a borrower in finding out a lender to suit the borrower's needs, choosing the loan program, preparing the loan application and obtaining the credit report and appraisal. The broker negotiates with the lender so that you can acquire the loan with payments that are affordable. He is paid either by the borrower or the lender and the payment is often included in the closing costs as fees and points.

The primary mortgage market has the following features:

• The lenders can acquire funds to issue new loans by selling the original loan to the secondary market.
  
  
• These loans can be packaged with other loans and handed over to the government agencies as mortgage backed securities. These securities are sold as bonds to the secondary market.
  

The primary mortgage market is a highly competitive market that includes different kinds of lenders and offers various choices to the borrowers as far as selecting a suitable lender is concerned. Apart from offering fixed rate loans, this market also provides adjustable rate loans with comparatively lower interest rates.Thus the primary mortgage market lenders provide homebuyers with a variety of options to avail a mortgage of their choice and fulfill their desire of purchasing a house of their own.