Finance
An Alaska lender's 'primary rate' versus 'secondary market rate' means that:
AThe primary rate is always higher than the secondary market rate
BThe secondary market's requirements for loans it will purchase (conforming standards) influence what the primary market lender can offer✓ Correct
CPrimary rates apply to commercial loans only
DSecondary rates apply only to second mortgages
Explanation
The secondary mortgage market (Fannie Mae, Freddie Mac) sets standards for loans it will purchase. Primary market lenders (banks, credit unions, mortgage companies) originate loans to secondary market standards so they can sell them. This connection influences interest rates and underwriting standards in the primary market.
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