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Kim Buyer is purchasing a home. The purchase price for the home is $125,000. Kim is...

Kim Buyer is purchasing a home. The purchase price for the home is $125,000. Kim is obtaining a loan from Acme Loan Company for $105,000. What is the amount of title insurance that Kim can purchase. What is the amount of title insurance that Acme Loan Company can purchase? and why.

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Expert Solution

Kim Buyer may purchase an owner’s policy in the amount of $125,000. This is because even though the loan is place the home is still hers.

The Acme company can only put a loan for what is owed to them. Hence, the Acme Loan Company may purchase a loan policy in the amount of $105,000. This is because the loan is of $105,000, hence that is only amount they can insure.

jeff jeffy answered 2 years ago
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