What is a deed of trust?

The definition of deed of trust: What is a deed of trust?

A deed of trust is the document used in some states instead of a mortgage. The title of the property is conveyed to a trustee rather than to the borrower. 

Is a deed of trust public recorded?

Yes a deed of trust is recorded in public records and can be browsed at each county's courthouse.

What is in the deed of trust? What does the deed of trust tell?

A deed of trust states that there is a lien on the real estate property. A deed of trust is used instead of a mortgage in some jurisdiction.

Different names for deed of trust 

A deed of trust is sometimes called a trust deed or a Potomac Mortgage.

How does a deed of trust work?

A deed of trust involves three parties:

• the trustor or the homeowner or borrower,
• the beneficiary or the lender, and
• the trustee or a neutral third party

The trustee holds temporary title until the trustor has paid off the lien.

Diagram illustration how a deed of trust works

Many people are confused of how a deed of trust works. Each party involved in a deed of trust agreement serve different purposes. The trustor in a deed of trust agreement is the homeowner or the borrower. The trusee of a deed of trust holds the title of the property until the amount borrowed is paid off or the lien is paid off. The trustee holds the title of the property for the benefit of the beneficiary or the lender.