Can anyone explain the role of lender?

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I’m in a class of property is the definition and confuses the hell outta me. “Lenders in savings through aggregation, and then allocated to individuals or companies that invest in fixed assets.” From my understanding of the lender, the bank being. What are they invest, as they are, the money to the person wants the mortgage. Including investors in this concept and what I am investing assets sie.Klar confused please give a good explanation.

  1. Reply
    April 29, 2011 at 9:00 pm

    lenders give money (belonging to others who have saved the money to use) to people who want to borrow it, and then the borrowers invest it in something that becomes an asset, like a home, or goods.

  2. Reply
    April 29, 2011 at 9:37 pm

    Savers are, for example, individuals with certificates of deposits or other investments intended to accrue interest.

  3. Reply
    Frederick M
    April 29, 2011 at 10:11 pm

    Okay, it’s pretty easy.

    The “savers” here would be the people who keep their money in the bank – in checking accounts, savings accounts, CDs, whatever.

    The banks are the “lenders” – the “intermediary lenders” (the go-betweens). They are investing in a loan, is the way to think about it.

    The bank writes out a check for $ 500,000 (say), to a couple who want to buy a house. The bank got the money from putting together all the money from all the little accounts it had. In return, the bank got a “promise to pay” from the couple (probably also backed by the collateral of the house) – the bank made a loan. That’s the business of banking.

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