What is a Deed of Trust?

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One of the many different documents associated with a mortgage is something termed a deed of trust. This is a document signed at closing between the seller and the buyer. The buyer agrees to pay on the mortgage and uses the property as legal collateral until the loan is paid in full. A deed of trust is not a mortgage but acts in a similar manner though. Some states utilize a deed of trust while other states use a deed of trust.

There are 3 parties associated with a deed of trust. First, is the trustee which is a third party holding legal title to the property. Second, is the trustor who is the borrower. Third, is the beneficiary which is the lender. The borrower provides the lender a promissory note in exchange for the deed of trust. The promissory note or just the note is the promise to pay the loan.

There are technical differences between a deed of trust and a mortgage, but it is not worth going into further detail as they act basically in the same way.

To learn more about a deed of trust or the mortgage loan process speak to a trusted mortgage professional who can answer all your questions.