Escrow & Title
In Oklahoma, the seller's existing mortgage must be paid off at closing because:
AOREC requires all properties to be sold free of mortgages
BThe seller must deliver clear title to the buyer, and the existing mortgage lien must be released to do so✓ Correct
CTitle insurance will not cover properties with existing mortgages
DThe buyer's lender will not allow multiple mortgages on the same property
Explanation
The seller must deliver marketable title at closing, which requires releasing any outstanding mortgage liens. The existing mortgage is typically paid from closing proceeds and the lender provides a release/satisfaction of mortgage.
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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.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
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.
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