Purchase Mortgage Market

DEFINITION of 'Purchase Mortgage Market'

A mortgage market for home financing transactions. The primary mortgage market is broken into two types of transactions: purchases and refinances. Both fall under the overall category of mortgage originations.

BREAKING DOWN 'Purchase Mortgage Market'

The purchase market is driven by broad economic factors such as employment and income growth and the rate of home price appreciation. The purchase market also has a seasonal factor as most people move during the spring and summer months. The purchase mortgage market has a sub-category of mortgages known as relocation mortgages.

While purchase mortgages and refinance mortgages are different in purpose, the level of activity in each is highly correlated to the other. For example, if home prices rise, creating equity in existing homes, some people might be motivated to "step-up" in housing by purchasing a bigger home with their newly available larger down payment, while others might extract that equity through a cash-out refinance.

RELATED TERMS
  1. Mortgage Originator

    An institution or individual that works with a borrower to complete ...
  2. Second Mortgage

    A type of subordinate mortgage made while an original mortgage ...
  3. Mortgage Banker

    A company, individual or institution that originates mortgages. ...
  4. Mortgage Company

    A company engaged in the business of originating and/or funding ...
  5. Mortgage Broker

    An intermediary who brings mortgage borrowers and mortgage lenders ...
  6. Home Mortgage

    A loan given by a bank, mortgage company or other financial institution ...
Related Articles
  1. Home & Auto

    Shopping for a mortgage in 2016? Use this tool first.

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2016 can all be done online.
  2. Economics

    How Interest Rates Affect The Housing Market

    Understand how rate changes can affect home prices, and learn how you can keep up.
  3. Home & Auto

    Comparing Reverse Mortgages vs. Forward Mortgages

    Which one a homeowner chooses depends on where you are at this point in your life, personally and financially.
  4. Retirement

    Additional Streams of Income for Seniors

    Find out how a reverse mortgage can work in your favor during retirement.
  5. Products and Investments

    Reverse Mortgages: Right for Clients? Not Often

    Reverse mortgages are a legitimate vehicle for folks age 62 and up to tap into the equity in their homes for other uses. Here's what to consider with them.
  6. Investing Basics

    Forecasting Mortgage Rates: Buy, Sell Or Refi?

    If you're paying off a mortgage or plan to buy a home, chances are you pay attention to where mortgage rates are heading. Consider these scenarios.
  7. Credit & Loans

    Mortgage Basics: Conclusion

    By Lisa SmithLet's recap what we've learned in this tutorial: At its most basic, a mortgage is a loan used to purchase a house. There are two primary types of mortgages: fixed rate and ...
  8. Wealth Management

    The Most Important Factors that Affect Mortgage Rates

    Discover what the most important factors are that affect mortgage interest rates. Factors range from inflation and economic growth to Federal Reserve activity, .
  9. Home & Auto

    How to Outsmart Private Mortgage Insurance

    It's possible to use a second mortgage to avoid this fee, but is it in your best interest?
  10. Credit & Loans

    Understanding the Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
RELATED FAQS
  1. What is an assumable mortgage?

    The purchase of a home is a very expensive undertaking and usually requires some form of financing to make the purchase possible. ... Read Answer >>
  2. What are the pros and cons of a simple-interest mortgage?

    Learn the difference between a simple interest mortgage and a standard mortgage, along with their relative advantages and ... Read Answer >>
  3. How can I avoid paying private mortgage insurance (PMI)?

    Private mortgage insurance (PMI) is an insurance policy that protects lenders from the risk of default and foreclosure, and ... Read Answer >>
  4. What’s the difference between a mortgage lender and a mortgage servicer?

    Buying a home is an exciting and confusing process. Once the loan is secured, it's important to know who gets the payment: ... Read Answer >>
  5. Is there any time I would want to have a zero-principal mortgage?

    As a general rule, entering a zero principal mortgage, or what is commonly referred to as an "interest-only mortgage", is ... Read Answer >>
  6. What are the different types of reverse mortgages?

    Discover the three different types of reverse mortgages available to homeowners aged 62 and older and the key similarities ... Read Answer >>
Hot Definitions
  1. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  2. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  3. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  5. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  6. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
Trading Center