A Deed of Trust is a deed in which the title to real property is transferred to a trustee, whom holds it as security for a loan between a borrower and lender. In a Deed of Trust, the borrower is known as the Trustor and the lender is known as the Beneficiary.
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In most transactions involving real estate, a Beneficiary, or lender, will loan a Trustor, or borrower, a certain amount of money to purchase a piece of real property. Through the application of a Deed of Trust, the borrower will then transfer title in the property to an independent Trustee, who will hold the title until the debt is repaid to the lender.
When the loan is paid in full, the trustee will then assign the title to the borrower. However, if the borrower defaults on the loan, the lender may commence foreclosure proceedings in order to obtain payment or receive title to the property.
The components of a Deed of Trust include:
- The original amount of the loan for purchase of the property.
- A legal description of the property used as security for the mortgage.
- The names, addresses and contact information of the parties involved.
- The inception and maturity date for the loan.
- A complete listing of all the provisions of the mortgage and its requirements.
- A schedule of the assessment of any late fees.
- The legal procedures all parties will follow for any breach of the contract.
- A list of riders with any covenants or clauses that involve stipulations about prepayment penalties, adjustable rate mortgages, acceleration clauses, alienation clauses and more.
A Deed of Trust form is an alternative to a mortgage and can be prepared online without the added expense of attorney fees. Do it yourself today and save money and time with a free Deed of Trust.