Contracts
The doctrine of 'equitable title' means that after signing a purchase contract, the buyer has:
AFull legal title to the property
BAn equitable interest giving them a right to receive legal title upon closing✓ Correct
CNo interest until the deed is recorded
DAn interest only if the earnest money has been paid
Explanation
Upon execution of a purchase contract, the buyer acquires equitable title—the right to receive legal title upon performance of the contract. Legal title remains with the seller until the deed is delivered at closing.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
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.
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.
Math Concepts
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