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A deed of trust is typically used in real estate. It is used for the transfer of property. The deed may involve the cooperation of three parties, including the borrower, the lender, and the trustee for the property. Personal information about these parties will be included on the form.
This type of deed may be used instead of a mortgage in order to transfer property and initiate financing. It can also be used to complete loans for things other than property. Because a deed of trust deals with monetary aspects, it is important to include as much information as possible about payments and due dates.
A deed of trust may be a legally binding contract, so it should be accurate and professional. Legal counsel can help you set up a deed of trust for your personal transaction to ensure that all parties involved are protected in case of a dispute.
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In the world of real estate, a deed of trust is a legally-binding for that transfers the legal title for the property to a trustee, or neutral third party. The trustee then holds the deed of trust as security for the repayment of the loan. The borrower of the money, likely the
person currently living
in or using the property, maintains an equitable title. This is the
right
to obtain full ownership of the property, generally by full repayment of the loan. While the borrower’s equitable title gives them current physical usage of the property, the completed deed of trust template means that the trustee will hold full legal ownership of the property until the terms and conditions of the agreement are met.
If you use a deed of trust form online, it’s important to understand what the form does and does not entail. Once the deed of trust template is executed, with the borrower holding the equitable title and the trustee holding the legal title, an escrow holder almost always comes into play. The escrow holder generally keeps all of the documents in one place for the transaction, including any funds, the grand deed and the deed of trust. This is to ensure that the title transfer and borrowing process will be completed only if or when both parties complete their respective parts of the deal.
When using a deed of trust form, many people wonder what the actual differences are between a deed of trust and a straight mortgage. In fact, the deed of trust template is often confused and used interchangeably with the standard mortgage process. So what, exactly, is the difference between the two? A deed of trust will always involve three parties – the buyer, the seller and a third, neutral party to ensure completion of the real estate contract. In most mortgages, the lender or mortgagor gives the legal title directly to the mortgagee. In both cases, the title the borrower holds will only be an equitable title until they are able to complete the terms and conditions of the legal agreement.
For those conducting their own real estate transactions, a deed of trust form can be found online, executed and filed with the county recorder or county clerk at the location of the property. Filing with the county clerk or county recorder is important. This filing acts as notice to any interested parties that the property is in the process of being purchased via deed of trust.
Although the deed of trust template can technically be used in most states, it is actually the most common tool for financing real estate in several states. These deed of trust friendly states include California, Colorado, the District of Columbia, Alaska, Arizona, Idaho, Maryland, Mississippi, Montana, Missouri, North Carolina, Nevada, Nebraska, Tennessee, Oregon, Texas, Utah, West Virginia, Washington and Virginia. In these states, deed of trust templates can be used for other types of loans and contracts wherein real estate is used as collateral.