Finance
The primary security instrument used in Arizona real estate transactions is:
AA mortgage with power of sale
BA deed of trust✓ Correct
CA land contract (contract for deed)
DA promissory note alone
Explanation
Arizona primarily uses a deed of trust as the security instrument. It involves three parties: the trustor (borrower), the trustee (neutral third party), and the beneficiary (lender).
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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.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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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