Finance
An Alaska lender requires title insurance as a condition of making a mortgage loan. The cost is typically paid by:
AThe lender directly
BThe buyer/borrower as a closing cost✓ Correct
CThe state of Alaska
DShared equally between buyer and seller
Explanation
The lender's title insurance policy premium is typically paid by the borrower as part of the closing costs. The policy protects the lender's security interest up to the loan amount.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
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.
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.
Math Concepts
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