Finance
In Hawaii, what is the primary function of the secondary mortgage market?
AA. To provide direct home loans to first-time buyers
BB. To buy mortgages from lenders, providing liquidity for new lending✓ Correct
CC. To set mortgage interest rates for all lenders
DD. To insure mortgages against default
Explanation
The secondary mortgage market (Fannie Mae, Freddie Mac) purchases mortgages from primary lenders, providing them with capital to originate new loans and maintaining the flow of mortgage funds.
People Also Study
Related Hawaii Questions
- In Hawaii, which factor most significantly affects the difference in value between leasehold and fee simple properties?Property Valuation
- What is 'secondary mortgage market' and why does it affect Hawaii home buyers?Finance
- In Hawaii, what is the effect of a view on property value?Property Valuation
- A Hawaii investor has a $900,000 property with a $600,000 mortgage at 5% interest. Annual interest expense is $30,000. The NOI is $55,000. What is the annual cash flow before taxes?Real Estate Math
- In Hawaii, which entity insures deposits in savings and loan associations and savings banks that provide mortgage loans?Finance
- In Hawaii, what is the primary purpose of a 'capital reserve study' for a condominium association?Property Management
- A Hawaii buyer purchases a condo for $520,000. HOA fees are $850/month, property taxes are $3,240/year, and the mortgage payment is $2,800/month. What is the total monthly housing cost?Real Estate Math
- What is the debt-to-income (DTI) ratio used for in Hawaii mortgage lending?Finance
Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
Study This Topic
Practice More Hawaii Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Hawaii Quiz →