Freddie Mac

Freddie Mac

The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, is a government-sponsored enterprise (GSE) that plays a crucial role in the U.S. housing market by purchasing mortgages from lending institutions. This process helps to expand the secondary real estate market.

By buying mortgages from banks and other lenders, Freddie Mac increases the liquidity in the housing market, making more funds available for home purchases. After acquiring a significant number of mortgages, Freddie Mac either holds these loans or packages them into mortgage-backed securities (MBS), which are then sold to public investors on the open market.

Freddie Mac was established by Congress with the objective of stimulating the real estate market and enhancing the availability of mortgage financing. The organization is regulated by the Federal Housing Finance Agency (FHFA) to ensure it meets its mission, and it also adheres to regulations set forth by the U.S. Department of Housing and Urban Development (HUD). Through its activities, Freddie Mac contributes to the stability and accessibility of homeownership in the United States.

Second Mortgage

Second mortgages are loans secured by property already used as collateral for a home loan. They can be a home equity loan or a home equity line of credit.

APR

The annual percentage rate (APR) is the full cost of borrowing money, shown as a percentage of your loan. It includes the interest rate plus all loan fees.

Borrower

A mortgage borrower is a person who gets a loan to buy a home. By borrowing money, they promise to pay it back fully and on time, including interest.

FHA Loan

FHA loans are government-insured to help make housing more affordable in the U.S. This insurance protects lenders from large losses, encouraging more lending.

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