Finance
In Missouri, a mortgage broker's role is to:
ALend money directly to borrowers
BOriginate loans on behalf of lenders and connect borrowers with appropriate loan products✓ Correct
CService existing mortgage loans
DGuarantee loans for the FHA
Explanation
A mortgage broker in Missouri acts as an intermediary between borrowers and lenders. They originate loans, gather borrower information, and place loans with lenders but typically do not fund the loans themselves.
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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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
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