The secondary mortgage market in West Virginia functions by:
Correct Answer
B) Purchasing existing mortgages from primary lenders to replenish their capital
The secondary mortgage market (Fannie Mae, Freddie Mac, Ginnie Mae) buys existing mortgages from primary lenders, packages them as mortgage-backed securities, and sells them to investors. This replenishes lenders' funds for new loans.
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Related Concepts
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
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