Property Ownership
Mississippi is a 'lien theory' state, which means:
AThe lender holds the title to the property until the loan is paid off
BThe borrower holds title and the lender holds a lien as security for the debt✓ Correct
CBoth parties hold equal title during the loan period
DProperty must be liened before it can be sold
Explanation
In lien theory states like Mississippi, the borrower retains title to the property and the lender receives a mortgage lien as security. The lien is released when the loan is repaid.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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.
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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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