Finance
In Alabama, a mortgage document in which the borrower retains title to the property while pledging it as collateral is called:
AA deed of trust
BA land contract
CA mortgage lien✓ Correct
DA security deed
Explanation
In a traditional mortgage, the borrower retains title and grants the lender a lien on the property as security. Alabama is a lien theory state, meaning the borrower holds title throughout the loan term.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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.
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