Deed of trust
A document used in some states instead of a mortgage to secure a home loan. Title is held by a neutral trustee until the loan is paid off. It usually makes foreclosure faster.
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Where this comes up: getting ready
Part 1 of 4
Why a seller cares
In many states the document securing your mortgage is a deed of trust, not a mortgage. At closing the title company pays it off and records a reconveyance, and the trustee's name on it is nothing to worry about.
Part 2 of 4
A simple example
Your loan in Texas is secured by a deed of trust naming a trustee. At closing the lender is paid and the trustee releases the deed of trust of record.
| The document | Where it is used, and what it does |
|---|---|
| Deed of trust | Many western and southern states; a trustee holds legal title until the loan is paid |
| Mortgage | The other states; the borrower holds title and the lender holds a lien |
| Either, at closing | Paid off from your proceeds and released of record |
Two names for the same job: the loan's claim on the house.
Part 3 of 4
What people get wrong
That a deed of trust means somebody else owns your home. The trustee's title is nominal; you own the home and sell it like anyone else.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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