Compare With Jumbo Mortgage [mortgage-assumption.blogspot.com]
Question by not helpping: Compare the secondary market activity for mortgages to the activity for other capital market instruments (such? Compare the secondary market activity for mortgages to the activity for other capital market instruments (such as stocks and bonds). Provide a general explanation for the difference in the activity level. Best answer for Compare the secondary market activity for mortgages to the activity for other capital market instruments (such?:
Answer by Lady Banker
This is a huge subject - but in brief: Stocks/equity are publicly traded shares in companies that are sold on the NYSE and LSE. Share prices go up and down and activity will relate to the economy and financials made available within certain time periods. There are also other, smaller exchanges such as NASDAQ. Also consider the issuance of IPO's (initial public offerings) - more activity here during economic booms. Bonds are publicly traded debt instruments- there is generally a flight to bonds during times of economic hardship because they are considered safer (payout before equity in bankcruptcy) -these have an interst rate and maturity term. Bonds are issued by companies, municipals and countries (sovereign debt). There is greater issuance during a slump as the securities are issued to keep the economy going- called quantative easing. Mortgage Bonds (CMO'S CDO's etc) are bonds issued to investors backed by collateral i.e. the mortgages of hundreds/thousands of people in different tranches depending on the maturity/credit quality. These damn things are one of the major causes of the financial crisis. Too complex, NINJA loans, "incorrectly" rated by the rating agencies. Market for these nosedived due to mortgage defaults.
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Before you go and step into the world of mortgages, it is important to do all of the research that you possibly can first. Regardless of whether you already own a home or if this is your first, things change in the industry each and every day. If you are looking at a jumbo mortgage, than you are going to be looking at jumbo loan rates and getting all of the information that you can may help you to save money in the long run. You may also be able to find some information that will help you have the process go smoothly.
Finding an agent that specializes in this type of loan can be a benefit to you as well. They are going to know all of the ins and outs when it comes to working with lenders. There are so many things that are going to affect your jumbo loan rates when you are applying for a jumbo mortgage that you need to know which way is the best for you. By not getting the right information you could end up with a lender that is not right for you and the loan you need.
For example, the amount of time that you are looking to have the loan for is going to greatly affect the amount of your monthly payment. The longer the amount of time the lesser the payment but you have to keep in mind the rate that you are getting on the money that you are getting. Since with a Jumbo mortgage you are going to be getting jumbo loan rates, you are going to be paying back a lot of money to the lender. This needs to be considered when you are talking about the length of the loan.
You also need to take into consideration the type of loan that you are going to take out as well. It is important to question this when it comes to adjustable, ARM and fixed loans. Each type is going to come with its own set of rules and its own rates and payback. Considering that you are already going for more than a conforming loan, you are going to find that the jumbo loan rates for your jumbo mortgage amount is going to be extremely high regardless. What is going to matter is how you are going to pay it back.
You really need to think about every tiny little aspect when you are dealing with lenders and a mortgage. If you are not careful and know the right questions that should be asked, you could end up with the short end of the stick. Working with a jumbo mortgage and the jumbo loan rates that are going to come with it can mean many years of large payments and more debt than you want. Tread lightly, be prepared and sign nothing until you are positive of the outcome. These steps may save you a lot of money and heartache in the years to come.
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