What security instrument is primarily used in Idaho real estate transactions to secure a loan?
Correct Answer
B) A deed of trust, which conveys title to a neutral third-party trustee
Idaho is primarily a deed-of-trust state. In a deed of trust, the borrower (trustor) conveys title to a neutral third-party trustee to hold on behalf of the lender (beneficiary) until the loan is repaid. While mortgages are legally permissible in Idaho, deeds of trust are predominant in practice because they allow for a faster non-judicial foreclosure process under Idaho Code § 45-1505.
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Related Topics & Key Terms
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Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
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%.
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