Laura Diekman ~ First Integrity Mortgage: Secondary Market

Monday, January 4, 2010

Secondary Market

What is the Secondary Market?

Earlier I talked about mortgage bankers selling their loans to the secondary market. You may have asked yourself, what is the secondary market?

The secondary market consists of investors who will buy the loan from the mortgage banker. They will take over the servicing of the loan. They usually consist of banks or financial institutions such as Fannie-Mae and Freddie-Mac.

The way they make money is on the interest differential between what they make in interest on the loan and the interest they pay investors.

Example of this: You are getting a loan with a mortgage bank. Your loan originator(LO) will work with you to decide what kind of loan will be best for you. To get you the best rate, the mortgage banker will have a choice between a variety of lenders from the secondary market. This ensures that you, the borrower, will get a competitive rate. For closing, the mortgage banker will provide funding for your loan. After the loan has been closed, the mortgage banker will sell the loan to lender from the secondary market that they thought had the best rate at the time. The lender from the secondary market will then take over your loan including the servicing of it.

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For Renters

If you are looking at the mortgage calculator to compare to your rent, make sure to figure in taxes and insurance.

In Missouri, a good average for taxes would be about $2,500 and a good average for insurance would be about $1,100. Divide this by 12 and you have your monthly taxes and insurance costs. Add this to your principal and interest payment, and you have your total monthly payment.

*Every state does vary in terms of taxes and insurance so make sure you are doing your homework to see what the average figures are for your area.

People and Services I Recommend

Realtor Resources -

Jeanne Hunsaker - Coldwell Banker Gundaker

*Jeanne is my personal realtor and helped my husband and me buy our first home. She really made us feel comfortable, and we knew that she wouldn't put us in a home that we would ever regret buying. She is very patient and extremely professional. She really does her homework, and I would recommend her to anyone to work with.

Greg Harwood - Remax Results

*I met Greg through a friend of mine that I did a loan for. Greg and I have had many successful purchase transactions together. Greg's passion is working with first time home buyers, and he is excellent at what he does. I recommend Greg to anyone, but I would say if you are a first time home buyer looking in South County or in St. Louis city, Greg is the realtor you should be working with.

Mark and Becci Sasser - Keller Williams

*Mark and Becci Sasser have been working with the owner of my company for many years. I was ecstatic when Joe said he wanted me to work with Mark and Becci. They are two of the most professional, hard-working people I have come into contact with. It is a pleasure to be working with them, and I would say it would be a pleasure for anyone to work with them.

Insurance -

Courtney Heffern - Liberty Mutual

*I was introduced to Courtney when she came into my office to speak with some loan officers. I was unable to talk with her that day because i was busy with a customer. She was persistant, and she invited me to go to a Women's Business Alliance meeting. I went, and I spoke with Courtney later. We have had the pleasure of working together since. I truly believe that Courtney cares about her customers, and most importantly, she is very honest and wants to take care of her customers the best she can.

Steve Rhodes - Farmers

*I knew Steve from my past life at Enterprise Rent-a-Car. We worked together at a couple different branches. Steve is very hard-working and does a great job for his customers. When he sees an opportunity for his customers to save money, he jumps on it. He has referred to me a few of his customers to refinance because he thought it could be beneficial for them. When working with Steve, I know that he will be prompt and get the deal done well before I need him to. He is a pleasure to work with and very knowledgable of his industry.

Mike Ehrlich - Crawford Butz

*I also knew Mike from my time at Enterprise. Mike is a very dedicated professional, and he has taught me things about the insurance industry that I would have never known before. He is always wanting a chance to see if he can beat someone else's rates, but he wants to make sure that his customers are insured the way they need to be. Mike is very knowledgable, and I know he does a great job.

Laura Diekman ~ First Integrity Mortgage

Monday, January 4, 2010

Secondary Market

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People and Services I Recommend

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