What Is Deed of Trust (Mortgage)?
Deed of Trust (Mortgage): The document that gives the lender a lien on your home as security for the loan.
Also called: mortgage, security instrument
A deed of trust, or a mortgage in some states, is the security instrument that pledges your home as collateral for the loan. It's recorded with the county and creates the lender's lien.
Deed of trust vs. mortgage
- Deed of trust: involves three parties (borrower, lender and a trustee). In many states it allows non-judicial foreclosure, without going to court.
- Mortgage: involves two parties (borrower and lender). Foreclosure usually requires a court process.
Which one you sign depends on your state.
What it covers
Your promises to pay property taxes, keep insurance, maintain the home and live in it if required, and the lender's rights if you don't.
When it's released
When you pay off the loan, the lender records a release (or reconveyance) removing the lien.