Escrow & Title
In Alaska, a 'deed of trust' differs from a mortgage primarily because:
AA deed of trust involves three parties, with the property held by a trustee✓ Correct
BA deed of trust does not require a promissory note
CA deed of trust is only used for commercial properties
DA deed of trust cannot be assigned to another lender
Explanation
A deed of trust involves three parties: the borrower (trustor), the lender (beneficiary), and a neutral third party (trustee) who holds legal title until the debt is repaid. In contrast, a mortgage involves only two parties (mortgagor and mortgagee).
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
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.
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