
American Mortgage Service Company was recognized as a Top Producing Lender for Kentucky Housing Corporation in 2020!
The Kentucky Housing Corporation (KHC) offer down payment assistance and mortgage tax credits to both first-time and repeat buyers.
If you are intered in learning more about KHC please reach out to one of our Kentucky licensed loan officer.

You spend a lot of time trying to build your real estate business through marketing efforts, referrals, and other resources. Unless you are offering what buyers and sellers are looking for in a real estate agent, however, you will have a lot of trouble finding repeat clients and referrals in the market. Once you know what people are looking for, you can start to market toward that and attract more clients than ever before.
What Buyers Are Looking For
There are many different kinds of buyers and you need to know what each of them are looking for. For example, first time home buyers are looking for someone who is very knowledgeable and can walk them through every part of the process with ease. Investors, on the other hand, are looking for something a bit more transactional as well as a lot of data. Most of them are looking for someone who can be aggressive when it comes to finding great deals. Out of town buyers will rely on you to be very thorough since they cannot be there to do that themselves. To be successful, you need to be able to identify the type of buyer you are dealing with to better serve them. All buyers will expect you to have a deep knowledge and understanding of the area so you can provide them with the insight before they purchase.
What Sellers Are Looking For
Sellers tend to be a lot less complex than buyers. On the surface, most of them are just looking for a real estate agent that can sell their home quickly and get them top dollar for the listing. You will not be able to do that for every home but you need to be able to tell people what is realistic and what they can do to get the job done faster, such as repairs or some landscaping. Not everyone will take your advice but when they do, it will make your job easier and you will be able to better impress them when it sells faster and for a great price. The best thing you can do with sellers is provide them with the best expectations so they do not come in with something unrealistic that will ruin their image of you in the end. If the seller cannot come closer to those realistic expectations, they may not be the best customer to rely on for referrals.
Basic Skills all Clients are Looking For
In the end, when it comes to some pretty basic skills, it will not matter whether or not you are working with buyers or sellers. All of your clients will expect you to have these basic skills when they hire you to be their real estate agent:
- Negotiation skills
- Knowledge of the area and neighborhoods
- Knowledge of the buying and selling process
- Knowledge of the contracts used during the process
- Communication skills
- Responsiveness
- Honesty and integrity
There are, of course, other skills that they will expect you to have such as basic people skills and technical skills as it pertains to the industry. As you get further along in your career, you will get better with the technical skills but you will need to actively work on your people skills if they are not as great as you would like them to be.
Once you have all of these skills mastered, you are ready to take on the real estate world and become a successful agent in the market of your choosing. Even if you have not mastered these skills, you should begin to work more and more on them so you can give your clients the best you can offer. Over time, you will begin to master all of them.

First Time Homebuyer Programs
https://myohiohome.org/firsttimehomebuyer.aspx
Eligibility Criteria
-
Applicants must meet OHFA Income limits.
-
Properties must meet purchase price limits which can vary by county.
-
Applicants must meet debt to income ratios for their loan type.
-
Credit score requirements
-
Conventional, USDA, VA, and FHA 203(k) Loans: 640 or Higher
-
FHA Loans (Non-203(k)): 660 or higher. Credit scores of 650-659 are acceptable for an additional fee.
-
-
Applicants must purchase a qualifying property that is limited to two acres within a municipal corporation and five acres outside a municipal corporation, unless additional acreage is required by local health or safety code. Qualifying properties include the following:
-
Existing homes: single-family dwellings, conforming condominiums, duplexes, and up to four-unit properties.
-
Newly built spec/nearly completed homes: one-unit single-family dwellings.
-
Modular Homes; one-unit single family dwellings
-
-
Additional requirements may apply to specific homeownership products
Please contact us today for more Information.
For more articles and updates, subscribe below.
First Time Home Buyer Programs for 2019 by State

Alabama
http://www.ahfa.com/homebuyers
Programs
Affordable Income Subsidy Grant
http://www.ahfa.com/homebuyers/programs-available/affordable-income-subsidy-grant
Mortgage Credit Certificate
http://www.ahfa.com/homebuyers/programs-available/mccs
Alaska
Programs
Tax-Exempt First-Time Homebuyer Program
https://www.ahfc.us/buy/loan-programs/first-time-loans
Taxable First -Time Homebuyer Program
https://www.ahfc.us/buy/loan-programs/first-time-loans
Arizona
https://housing.az.gov/general-public/home-plus
Home Plus Program
https://housing.az.gov/general-public/home-plus
Arkansas
Programs:
ADAF Move Up
https://homeloans.arkansas.gov/move-up/
ADFA MCC - Mortgage Credit Certificate
https://homeloans.arkansas.gov/mcc/
ADFA Down Payment Assistance (DPA)
https://homeloans.arkansas.gov/dpa/
Arkansas Dream Down Payment Initiative (ADDI)
https://homeloans.arkansas.gov/addi/
California
https://www.calhfa.ca.gov/homebuyer/programs/index.htm
Programs
First Mortgage Programs
CalHFA Conventional Loan Program
https://www.calhfa.ca.gov/homebuyer/programs/conventional.htm
CalPLUS Conventional Loan Program
https://www.calhfa.ca.gov/homebuyer/programs/calplus-conventional.htm
Government Insured Loans
CalHFA FHA Loan Program
https://www.calhfa.ca.gov/homebuyer/programs/fha.htm
CalPLUS FHA Loan Program
https://www.calhfa.ca.gov/homebuyer/programs/calplus.htm
Cal-EEM + Grant Program
https://www.calhfa.ca.gov/homebuyer/programs/eem.htm
CalHFA VA Loan Program
https://www.calhfa.ca.gov/homebuyer/programs/va.htm
Down Payment Assistance Programs
MyHome Assistance Program
https://www.calhfa.ca.gov/homebuyer/programs/myhome.htm
School Teacher and Employee Assistance Program (School Program)
https://www.calhfa.ca.gov/homebuyer/programs/school.htm
Mortgage Credit Certificate Tax Credit Program
Mortgage Credit Certificate Tax Credit Program (MCC)
https://www.calhfa.ca.gov/homebuyer/programs/mcc.htm
Colorado
https://www.chfainfo.com/homeownership
Down Payment Assistance
https://www.chfainfo.com/homeownership/down-payment-assistance
Connecticut
https://www.chfa.org/homebuyers/
HFA Advantage and HFA Preferred
https://www.chfa.org/homebuyers-homeowners/homebuyers/hfa-preferred-mortgage/
Homebuyer Mortgage Program
https://www.chfa.org/homebuyers-homeowners/homebuyers/homebuyer-mortgage-program/
Down Payment Assistance Program (DAP) Loans
https://www.chfa.org/homebuyers-homeowners/homebuyers/downpayment-assistance-program-dap-loan/
Delaware
http://www.destatehousing.com/HomeOwnership/HomeOwnership.php
Home Ownership Programs
Home Ownership Loan Program
http://www.destatehousing.com/HomeOwnership/hb_sfmrb.php
Delaware First-Time Homebuyer Tax Credit
http://www.destatehousing.com/HomeOwnership/hb_fthb.php
Neighborhood Stabilization Program (NSP)
http://www.destatehousing.com/HomeOwnership/dv_nsp.php
Downpayment and Closing Cost Assistance
Preferred Plus
http://www.destatehousing.com/HomeOwnership/hb_sfmrb.php#pp
Home Repair Programs
The Statewide Emergency Repair Program (SERP)
http://www.destatehousing.com/HomeOwnership/homeownermedia/serp_card.pdf
Community Development Block Grants (CDBG)
http://www.destatehousing.com/Landlords/dv_cdbg.php
Foreclosure Prevention Programs
Delaware Emergency Mortgage Assistance Program (DEMAP)
http://www.destatehousing.com/HomeOwnership/hb_demap.php
Manufactured Housing Assistance Program (MHAP)
http://www.destatehousing.com/HomeOwnership/hb_mhap.php
Wilmington Senior Tax Assistance Program
http://www.destatehousing.com/HomeOwnership/hb_wstap.php
Florida
http://www.floridahousing.org/
Mortgage Credit Certificate Program
Florida Homebuyer Loan Program
https://apps.floridahousing.org/StandAlone/FTHBWizard
Georgia
https://www.dca.ga.gov/safe-affordable-housing/homeownership
State Home Mortgage
https://www.dca.ga.gov/safe-affordable-housing/homeownership/state-home-mortgage
Georgia Dream
https://www.dca.ga.gov/safe-affordable-housing/homeownership/georgia-dream
HomeSafe Georgia
https://www.dca.ga.gov/safe-affordable-housing/homeownership/homesafe-georgia
Housing Counselor Resources and Training
https://www.dca.ga.gov/safe-affordable-housing/homeownership/housing-counselor-resources-training
Hawaii
http://dbedt.hawaii.gov/hhfdc/
HHFDC Affordable Resale Program Project
https://www.locationshawaii.com/hhfdc/
Mortgage Credit Certificate
http://dbedt.hawaii.gov/hhfdc/mortgage-credit-certificate/
Buyback and SAE Programs
http://dbedt.hawaii.gov/hhfdc/request-for-information-on-hhfdc-sae-property/
Hula Mae Single Family Loans (Not currently active)
http://dbedt.hawaii.gov/hhfdc/copy_of_homebuyers/
Idaho
https://www.idahohousing.com/homebuyers/
Homebuyer Tax Credit
https://www.idahohousing.com/lenders-realtors/homebuyer-tax-credit/
Down Payment / Closing Cost Assistance
https://www.idahohousing.com/lenders-realtors/down-payment-closing-cost-assistance/
Illinois
IHDAccess Forgivable
https://www.ihda.org/my-home/getting-an-ihda-loan/#collapseOne
IHDAccess Deferred
https://www.ihda.org/my-home/getting-an-ihda-loan/#collapseTwo
IHDAccess Repayable
https://www.ihda.org/my-home/getting-an-ihda-loan/#collapseThree
1stHomeIllinois
https://www.ihda.org/my-home/getting-an-ihda-loan/#collapseFour
Indiana
https://www.in.gov/ihcda/homeownership/
Honor Our Vets (HOV)
https://www.in.gov/ihcda/homeownership/files/2018%20Honor%20Our%20Vets%20Program%20Guide.pdf
Helping To Own (H2O)
https://www.in.gov/ihcda/homeownership/files/2017%20HELPING%20TO%20OWN%20PROGRAM%20GUIDE_SH.pdf
Mortgage Credit Certificate (MCC)
https://www.in.gov/ihcda/homeownership/files/2017%20MCC%20PROGRAM%20GUIDE_SH.pdf
Next Home (NH)
https://www.in.gov/ihcda/homeownership/files/2017%20NEXT%20HOME%20PROGRAM%20GUIDE_SH.pdf
Next Home With Mortgage Credit Certificate (NH/MCC)
Affordable Home (AH)
https://www.in.gov/ihcda/homeownership/files/2017%20AFFORDABLE%20HOME%20PROGRAM%20GUIDE_SH.pdf
My Home (MH)
https://www.in.gov/ihcda/homeownership/files/2017%20MY%20HOME%20PROGRAM%20GUIDE_SH.pdf
My home with Mortgage Credit Certificate (MH/MCC)
Iowa
http://iowahousehunt.com/begin/
Mortgage Programs
http://iowafinanceauthority.gov/Public/Pages/PC77LN25
Down Payment Assistance Programs
http://iowafinanceauthority.gov/Public/Pages/PC78LN25
Mortgage Credit Certificate Program
http://iowafinanceauthority.gov/Public/Pages/PC93LN25
Military Home owership Assistance Program
http://iowafinanceauthority.gov/Public/Pages/PC79LN25
Iowa Title Guaranty
http://www.iowafinanceauthority.gov/TitleGuaranty/Residential
Kansas
http://www.kshousingcorp.org/homebuyer-assistance.aspx
Kentucky
http://www.kyhousing.org/Home-Buyers/Pages/default.aspx
Down Payment Closing Cost Assistance
http://www.kyhousing.org/Home-Buyers/Pages/Down-Payment-Closing-Cost-Assistance.aspx
Hardest Hit Fund (HHF) DAP
http://www.kyhousing.org/make-the-move/Pages/default.aspx
Home Buyer Tax Credit
http://www.kyhousing.org/Home-Buyers/Pages/Home-Buyer-Tax-Credit.aspx
Louisiana
https://www.lhc.la.gov/homebuyers
MRB Home and Assisted
https://www.lhc.la.gov/mrb-homebuyers#
Market Rate GNMA Program
https://www.lhc.la.gov/gnma-homebuyers
LHC Preferred Conventional Program
https://www.lhc.la.gov/preferred-homebuyers
LHC Choice Conventional Program
https://www.lhc.la.gov/choice-homebuyers#
LCH Advantage Program
https://www.lhc.la.gov/advantage-homebuyers
Delta 100 Program
https://www.lhc.la.gov/delta-homebuyers
Mortgage Credit Certificate Program
https://www.lhc.la.gov/mcc-homebuyers
Soft Second Program
https://www.lhc.la.gov/soft-second-homebuyers
Down Payment Assistance Programs
https://www.lhc.la.gov/down-payment-assistance-homebuyers#
Maine
http://www.mainehousing.org/programs-services/homebuyer/home-loan
First Home loan:
http://www.mainehousing.org/programs-services/homebuyer/home-loan#Loan
Maryland
https://mmp.maryland.gov/Pages/default.aspx
Programs:
MMP 1st Time Advantage with 3% Assistance
https://mmp.maryland.gov/Pages/1stTimeAdvantage3.aspx
MMP 1st Time Advantage
https://mmp.maryland.gov/Pages/1stTimeAdvantage.aspx
Maryland Mortgage Loan Assist
https://mmp.maryland.gov/LoanAssist/Pages/default.aspx
Maryland Mortgage Grant Assist
https://mmp.maryland.gov/GrantAssist/Pages/default.aspx
Maryland Mortgage Rate Assist
https://mmp.maryland.gov/RateAssist/Pages/default.aspx
Partner Match
https://mmp.maryland.gov/Pages/Downpayment.aspx
Maryland HomeCredit
https://mmp.maryland.gov/Pages/MDHomeCredit.aspx
Maryland SmartBuy Program
https://mmp.maryland.gov/Pages/SmartBuy/default.aspx
Massachusetts
https://www.masshousing.com/portal/server.pt/community/home_ownership/223/home_ownership_home
MassHousing Mortgage
https://www.masshousing.com/portal/server.pt/community/home_buyer_loans/226/masshousing_loan
Operation Welcome Home
https://www.masshousing.com/portal/server.pt/community/home_buyer_loans/226/operation_welcome_home
Down Payment Assistance
https://www.masshousing.com/portal/server.pt/community/home_buyer_loans/226/down_payment_assistance
Michigan
https://www.michigan.gov/mshda/0,4641,7-141-45866---,00.html#!#homebuyers
Programs:
MI Home Loan Mortgage
https://www.michigan.gov/mshda/0,4641,7-141-45866_45868-370762--,00.html
MI Home Loan Flex
https://www.michigan.gov/mshda/0,4641,7-141-45866_45868-284858--,00.html
Step Forward Down Payment Assistance Loan
https://www.michigan.gov/downpayment/0,8844,7-353-88583---,00.html
Mortgage Credit Certificate (MCC)
https://www.michigan.gov/mshda/0,4595,7-141-45866_45868-216692--,00.html
Individual Development Account
https://www.michigan.gov/mshda/0,4641,7-141-45866_45868-172118--,00.html
Housing Education Program
https://www.michigan.gov/mshda/0,4641,7-141-45866_45868-177801--,00.html
Minnesota
Mississippi
https://www.mshomecorp.com/how-we-help/helping-homebuyers/
Missouri
http://www.mhdc.com/homes/index.htm
Programs:
First Place Loan Program
http://www.mhdc.com/homes/firstplaceloans/index.htm
Mortgage Credit Certificate (MCC)
http://www.mhdc.com/homes/mcc/index.htm
Montana
http://housing.mt.gov/Homebuyers
Programs:
Regular Bond Loan Program
http://housing.mt.gov/HBRegBond
Set Aside Program
http://housing.mt.gov/HBSetaside
Montana Veterans’ Home Loan
Down Payment Assistance
80% Combined Program
http://housing.mt.gov/HB80Combined
Habitat for Humanity
http://housing.mt.gov/HBHabitat
Mortgage Credit Certificate
Board of Investments
Disabled Accessible Affordable Homeownership
Nebraska
https://www.nifa.org/homebuyer
Programs
https://www.nifa.org/homebuyer/loan-programs
Eligibility
https://www.nifa.org/homebuyer/eligibility
Interest Rates
https://www.nifa.org/homebuyer/interest-rates
Nevada
https://www.homeispossiblenv.org/
Programs:
Home is Possible
https://www.homeispossiblenv.org/home-possible-nevada-down-payment-assistance-program
Home is Possible for Heroes
https://www.homeispossiblenv.org/program/home-possible-heroes
Mortgage Credit Certificate
https://www.homeispossiblenv.org/home-possible-mortgage-credit-certificate
Home is Possible for Teachers
https://www.homeispossiblenv.org/program/home-possible-teachers
New Hampshire
https://www.gonewhampshirehousing.com/
Programs
Homebuyer Tax Credit
https://www.gonewhampshirehousing.com/our-programs/homebuyer-tax-credit
Mortgage Programs:
https://www.gonewhampshirehousing.com/our-programs/mortgage-programs
New Jersey
https://www.njhousing.gov/homeownership/
Programs
NJHMFA Down Payment Assistance Program
https://www.njhousing.gov/dca/hmfa/homeownership/buyers/dpa/
First-Time Homebuyer Mortgage Program
https://www.njhousing.gov/dca/hmfa/homeownership/buyers/first/
Police and Firemen's Retirement System Mortgage Program
https://www.njhousing.gov/dca/hmfa/homeownership/buyers/retire/
New Mexico
http://www.housingnm.org/homebuyers/home-buyers
Programs
First Home Program
http://www.housingnm.org/homebuyers/first-home
First Down Program
http://www.housingnm.org/homebuyers/first-down
NextHome Program
http://www.housingnm.org/homebuyers/next-home-program
New York
Programs
SONYMA Neighborhood Revitalization Program
http://www.nyshcr.org/Topics/Home/Buyers/SONYMA/SONYMA-NRP.htm
SONYMA Graduate to Homeownership Program
http://www.nyshcr.org/Topics/Home/Buyers/SONYMA/SONYMA-grad2home.htm
Conventional Plus Progran
http://www.nyshcr.org/Topics/Home/Buyers/ConventionalPlusProgram.htm
FHA Plus Program
http://www.nyshcr.org/Topics/Home/Buyers/FHAPlusProgram.htm
Manufactured Home Advantage Program
http://www.nyshcr.org/Topics/Home/Buyers/MHAP.htm
Down Payment Assistance Loan (DPAL)
http://www.nyshcr.org/Topics/Home/Buyers/SONYMA/DownPaymentAssistanceLoan(DPAL).htm
North Carolina
https://www.nchfa.com/home-buyers
Programs
NC Home Advantage Mortgage
NC 1st Home Advantage Down Payment
NC Home Advantage Tax Credit
North Dakota
https://www.ndhfa.org/Homeownership/Intro.html
Programs:
First Home
https://www.ndhfa.org/Homeownership/Firsthome.aspx
Home Access Program
https://www.ndhfa.org/Homeownership/Homeaccess.aspx
North Dakota Roots
https://www.ndhfa.org/Homeownership/Roots.aspx
Major Home Improvement Program
https://www.ndhfa.org/Homeownership/Majorhomeimprovement.aspx
Targeted Area Loan Program
https://www.ndhfa.org/Homeownership/TargetedAreas.html
Ohio
Programs
First-Time Homebuyer
https://myohiohome.org/firsttimehomebuyer.aspx
Your Choice! Down Payment Assistance
https://myohiohome.org/downpaymentassistance.aspx
OHFA Advantage
https://myohiohome.org/homebuyeradvantage.aspx
Grants for Grads
https://myohiohome.org/grantsforgrads.aspx
Ohio Heros
https://myohiohome.org/ohioheroes.aspx
Mortgage Tax Credit
https://myohiohome.org/mortgagetaxcredit.aspx
Target Area Loan
https://myohiohome.org/Geodata/Default.aspx
Next Home
https://myohiohome.org/nexthome.aspx
Renovate Ohio
https://myohiohome.org/renovateohio.aspx
Oklahoma
Programs
https://www.ok.gov/ohfa/Homebuyers/index.html
Oregon
https://www.oregon.gov/ohcs/Pages/oregon-bond-loan-program.aspx
Pennsylvania
https://www.phfa.org/homebuyers/
Programs
Home Purchase
https://www.phfa.org/programs/homepurchase.aspx
Purchase Assistance
https://www.phfa.org/programs/assistance.aspx
Refinance Options
https://www.phfa.org/programs/refinance.aspx
Home Improvements/Repairs
https://www.phfa.org/programs/repairs.aspx
Rhode Island
Programs
First Down - Down Payment Assistance
https://loans.rihousing.com/First_Down/
First Homes
https://loans.rihousing.com/FirstHomes/
Beyond First Homes
https://loans.rihousing.com/Beyond_FirstHomes/
Lasting Homes
https://loans.rihousing.com/LastingHomes/
Septic and Sewer
https://loans.rihousing.com/SepticSewer/
South Carolina
http://www.schousing.com/Home/HomeBuyers
Programs
SC Housing Homebuyer Program
http://www.schousing.com/Home/HomebuyerProgram
Mortgage Credit Certificates
http://www.schousing.com/Home/MortgageCreditCertificates
Palmetto Home Advantage
http://www.schousing.com/Home/Palmetto-Home-Advantage
Hardest Hit Fund Down Payment Assistance
http://www.schousing.com/Home/HHF-Down-Payment-Assistance
Income/Home Price Limits
http://www.schousing.com/Home/HomeLimits
South Dakota
http://www.sdhda.org/home-ownership/first-time-homebuyers.html
Tennessee
Programs
Down Payment Assistance
https://thda.org/homebuyers/down-payment-assistance-1
Great Choice Home Loans
https://thda.org/homebuyers/great-choice-home-loans
Texas
http://www.tdhca.state.tx.us/homeownership/
Programs
My First Texas Home
http://www.tdhca.state.tx.us/homeownership/fthb/my-first-texas-home.htm
My Choice Texas Home
http://www.tdhca.state.tx.us/homeownership/fthb/my-choice-texas-home.htm
Texas Mortgage Credit Certificate Program
http://www.tdhca.state.tx.us/homeownership/fthb/mort_cred_certificate.htm
Utah
https://utahhousingcorp.org/homebuyer
Programs
Down Payment Assistance
https://utahhousingcorp.org/homebuyer/programs/downPaymentAssistance
Home Loans
https://utahhousingcorp.org/homebuyer/programs/homeLoans
Grants for Veterans
https://utahhousingcorp.org/homebuyer/programs/grantsForVeterans
Vermont
https://www.vhfa.org/homebuyers/buyahome
Programs
https://www.vhfa.org/homebuyers/loanprograms
Virginia
https://www.vhda.com/Pages/Home.aspx
Programs
Home Loans
Https://www.vhda.com/Homebuyers/VHDAHomeLoans/Pages/VHDAHomeLoans.aspx#.XEi1v1zYq70
VHDA Plus Second Mortgage
https://www.vhda.com/Homebuyers/VHDAHomeLoans/Pages/VHDAHomeLoans.aspx#.XEi17FzYq70
Washington
http://www.wshfc.org/buyers/index.htm
Programs:
Home Advantage
http://www.wshfc.org/buyers/HomeAdvantage.htm
House Key Opportunity Program
http://www.wshfc.org/buyers/key.htm
Energy Spark Home Loan
http://www.wshfc.org/EnergySpark/index.htm
Mortgage Credit Certificate
http://www.wshfc.org/buyers/MCCprogram.htm
West Virginia
Programs
Homeownership Program
https://www.wvhdf.com/home-buyers/homeownership-program
Down Payment/Closing Cost Assistance Program
https://www.wvhdf.com/home-buyers/down-paymentclosing-cost-assistance
Moving Up Program
https://www.wvhdf.com/home-buyers/movin-up-loan-program
On-Site System Program
https://www.wvhdf.com/home-buyers/on-site-systems-loan-program
WVHDF Refinance Program
https://www.wvhdf.com/home-buyers/wvhdf-refinance-program-2
USDA 502 Direct Loan Program
https://www.wvhdf.com/home-buyers/usda-502-direct-loan-program
Wisconsin
https://www.wheda.com/Home-Buyers/
Programs
https://www.wheda.com/Home-Buyers/Available-Programs/
Wyoming

Often times borrowers wonder about the basics of the “secondary” mortgage market. But what are they, and why do lenders “sell” them loans? Mortgages, and specifically liens, are substantial sums of money that are tied up for up to 30 years.
While depository institutions, which are chartered by both the Federal and State governments, have the capacity to lend large amounts of capital over long periods of time, mortgage banks don’t. Keep in mind that a bank, in theory, can take the money it has in deposits, pool the money together, and lend it out to make home loans.
In order to maintain a sufficient pool of money such that they can continue making loans, mortgage banks, which do not take deposits companies but offer greater program and rate flexibility, “sell off” borrower’s mortgages to another institution—often Fannie or Freddie, but also to pension funds, insurance companies, or securities dealers. Along with allowing mortgage banks to do more business, this practice earns mortgage bankers a commission on every loan they sell.
A mortgage has one of two paths it can follow once it enters the secondary market. It can be sold by a lender into one of Freddie, Fannie, or another financial institution’s investment portfolios for cash, or it can be pooled with other mortgages in exchange for Mortgage-Backed Securities (MBS). MBS are very liquid investments that are traded on Wall Street through securities dealers, which means that lenders can easily hold or sell them. In turn, these transactions provide capital that can be loaned out to other borrowers.
BLOG DISCLAIMER
Content on this site is for informational purposes only. It is not to be construed as legal, financial, personal or other advice. Information and opinions offered are those of independent sources and may not be endorsed by American Mortgage Service Company and/or AmericanMortgage.com. We make no representations as to the suitability or validity of information in a blog on this site. We are not liable for any errors or content of blogs or for any losses, injuries or damages arising from its display or use. There is no obligation to update information provided in a blog on this site.