Escrow & Title
What is a 'deed of trust' and is it commonly used in Illinois?
AA trust document used to transfer property to heirs; very common in Illinois
BA three-party security instrument (borrower, trustee, lender) used in many states instead of a traditional mortgage; Illinois primarily uses traditional mortgages✓ Correct
CA deed held in escrow until the buyer pays for the property; common in seller financing
DAn Illinois state instrument identical to a traditional mortgage
Explanation
A deed of trust involves three parties: the borrower (trustor), a neutral trustee, and the lender (beneficiary). Title is held by the trustee until the loan is repaid.
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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).
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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