Escrow & Title
ALTA title insurance policies differ from standard policies because they:
ACover only the lender's interest
BOffer extended coverage including survey matters and off-record risks✓ Correct
CAre required only for commercial properties
DCover only claims arising after the policy date
Explanation
ALTA (American Land Title Association) extended policies cover additional risks not covered by standard policies, such as encroachments, survey issues, and certain off-record matters.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
AmortizationThe 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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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