Purchase Mortgage Market

AAA

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.

INVESTOPEDIA EXPLAINS '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

    A debt instrument, secured by the collateral of specified real ...
  2. Relocation Mortgage - Relo

    A type of mortgage that is designed for relocating/transferring ...
  3. Secondary Mortgage Market

    The market where mortgage loans and servicing rights are bought ...
  4. Primary Mortgage Market

    The market where borrowers and mortgage originators come together ...
  5. Interest Rate Risk

    The risk that an investment's value will change due to a change ...
  6. Mortgage Recast

    A feature in some types of mortgages where the remaining scheduled ...
RELATED FAQS
  1. Is the banking sector subject to any seasonal trends?

    The banking industry, including retail and investment banks, is subject to seasonal trends. Seasonality is most commonly ... Read Full Answer >>
  2. What is the difference between an Equity REIT and a Mortgage REIT?

    There are several types of real estate investments trusts (REITS) that investors can purchase, including equity REITS and ... Read Full Answer >>
  3. When should a real estate broker release earnest money deposit funds?

    As soon as an agent or broker accepts an earnest money deposit, he becomes an escrow agent. This means that, in most cases, ... Read Full Answer >>
  4. Can small investors buy collateralized mortgage obligations (CMOs)?

    Collateralized mortgage obligations (CMOs), which are pools of mortgage-backed securities (MBS), are available to smaller ... Read Full Answer >>
  5. What is the difference between an option-adjusted spread and a Z-spread in reference ...

    Unlike the Z-spread calculation, the option-adjusted spread takes into account how the embedded option in a bond can change ... Read Full Answer >>
  6. What are some historical examples of debt securitization?

    The first debt securities were probably sovereign debt assets that were transferred from the British government to mercantilist ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    4 Steps To Attaining A Mortgage

    It starts with knowing your choices as well as your price range. We show you how to get there.
  2. Budgeting

    Mortgages: How Much Can You Afford?

    Answering this means number-crunching as well as factoring in other considerations and expenses.
  3. Options & Futures

    Make A Risk-Based Mortgage Decision

    Find out how to choose which mortgage style is right for you.
  4. Credit & Loans

    How To Get A Mortgage On A Houseboat

    You actually can't get a mortgage on a houseboat, but you can get a loan. A floating home, however, is eligible for a mortgage. Read on for advice.
  5. Home & Auto

    Buying a Home? The Best Places Share This Feature

    The most lucrative areas to invest in a home are cities where job growth is robust.
  6. Home & Auto

    What Are The Tax Advantages Of Buying A Home?

    Don't forget these deductions and credits that homeowners can use to reduce their tax bill.
  7. Credit & Loans

    How To Finance Foreign Real Estate

    If you don't pay cash, financing real estate abroad is likely to cost more than at home. Watch for local laws and be sure your rights are protected.
  8. Credit & Loans

    Save? (Or Prepay Your Mortgage Or Student Loan?)

    With low-interest rate loans, you might be better off paying just your monthly minimum and investing whatever extra funds you have.
  9. Credit & Loans

    Not a U.S. Citizen? A Home Loan is Still Possible

    Many banks and mortgage companies offer conventional and FHA home loans to non-U.S. citizens, if they can verify their work history and financial status.
  10. Credit & Loans

    Should You Care About The Rising Cost Of College?

    It’s nearly graduation season, so it’s time to weigh in on why you should care about rising college costs, paying for tuition and back student loans.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center