Lending Markets

There are a few different types of lending markets out there available to consumers. It is important to decided with type of lending market is going to be the most beneficial for you type of investment and loan. The three most popular lending markets are Primary, Secondary, and Subprime. There are a few differences in all three of these markets.

Lenders make funds available to borrowers through a primary market. This is where lenders originate the loans and the borrower can see the source of the mortgage loan money is the primary market. In this type of loan the borrow has direct contact with the institute that is borrowing the funds for the loan. The primary market takes the loan application, where the loan officer interviews the applicant, where the loan check comes from, and the place to which the loan payments are sent to from the borrower. There are two places that the funds can be divided in this source. The two markets are those regulated by the federal government and those that are not regulated by the federal government. Primary lenders sell their loans in what is called a secondary market so it is important to research the decision.

There are regulated and non regulated lenders. Regulated lenders are subject to restrictive regulations and they are subject to examination by federal regulators. Non regulated lender is usually commercial finance companies and they are not restricted to the same restrictive regulations that regulated lenders are. It is in the borrower’s best

Interest to contact both types of markets to make the best choice of available money. It is

Also important to check with state and urban laws because they can differ from market to market.

In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market be highly liquid. Secondary marketing is vital to an efficient and modern capital market. Fundamentally, secondary markets mesh the investor's preference for liquidity with the capital user's preference to be able to use the capital for an extended period of time. For example, a traditional loan allows the borrower to pay back the loan, with interest, over a certain period. For the length of that period of time, the bulk of the lender's investment is inaccessible to the lender, even in cases of emergencies. With a securitized loan or equity interest (such as bonds) or tradable stocks, the investor can sell, relatively easily, his or her interest in the investment, particularly if the loan or ownership equity has been broken into relatively small parts. This selling and buying of small parts of a larger loan