James purchases a home in Jackson, Mississippi and finances the purchase through a local bank. The loan is secured using the standard Mississippi security instrument. Which of the following correctly identifies the THREE parties involved in that security instrument?
Correct Answer
C) Trustor, trustee, and beneficiary
Mississippi's primary security instrument is the deed of trust (Miss. Code Ann. §89-7-1 et seq.), which involves three parties: the trustor (borrower/James), the trustee (a neutral third party who holds title as security), and the beneficiary (the lender/bank). This three-party structure is what distinguishes a deed of trust from a two-party mortgage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
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