In Texas, when a veteran obtains a VA loan to purchase a primary residence, the lien instrument used to secure the loan is known as which of the following?
Correct Answer
D) A deed of trust with a power of sale clause
Texas is a deed of trust state. All real estate loans, including VA loans, are secured by a deed of trust that includes a power of sale clause, allowing non-judicial foreclosure under Texas Property Code §51.002.
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Related Concepts
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.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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