Maria is purchasing a home in Norman, Oklahoma. Her lender requires a security instrument to be recorded against the property. Her real estate broker tells her that Oklahoma uses a different security instrument than the state she previously lived in, which used deeds of trust. Which of the following correctly describes how Oklahoma's security instrument differs from a deed of trust?
Correct Answer
A) Oklahoma uses a mortgage, which involves two parties, and the lender holds a lien rather than legal title.
In Oklahoma, a mortgage is the standard security instrument and involves two parties: the mortgagor (borrower) and the mortgagee (lender). Under Oklahoma's lien theory, the borrower retains legal title to the property, and the lender holds only a lien as security. This contrasts with a deed of trust, which involves three parties (borrower, lender, and trustee) and transfers legal title to the trustee during the loan term.
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Related Concepts
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
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