Note Versus Mortgage (or Deed of Trust)

Note Versus Mortgage (or Deed of Trust)

What is a Note?

A note is a promissory note. It is your promise to repay money that you borrowed. This note states who the borrower is, who the lender is, the date, the terms and length of repayment.

What is a Mortgage?

It is a security instrument. Think of it as collateral. The mortgage creates a lien on the property. The mortgage allows the lender to foreclose if you default on the Note.

-In a mortgage there are two parties;

          1. the Borrower
          2. the Lender

What is a Deed of Trust?

It is a security instrument. It essentially operates the same as a mortgage.

-In a Deed of Trust there are three parties;

          1. the Borrower
          2. the Lender
          3. the Trustee

 

 

Disclaimer: I am not a lawyer and this is not legal advice. If you are seeking legal advice please consult an experienced and competent attorney.

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