Finance
Vermont's 'mortgage broker' differs from a mortgage banker in that:
AA mortgage broker lends their own money
BA mortgage broker arranges loans between borrowers and third-party lenders, not lending their own funds✓ Correct
CA mortgage banker is not regulated in Vermont
DA mortgage broker can only provide VA loans
Explanation
A mortgage broker is an intermediary who matches borrowers with third-party lenders, earning a fee for the service without using their own capital. A mortgage banker originates loans using their own funds and may sell them on the secondary market.
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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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
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