Trust deed agreement sample

A Deed of Trust is not a typical deed. It does not transfer the ownership of real property in the usual sense. Instead, a Deed of Trust creates a lien on real property as security or collateral for a loan. If the loan is not repaid on time, the lender can foreclose on and sell the property in order to pay off the loan.

A Deed of Trust is typically used in combination with a Promissory Note or Mortgage Agreement which sets out the amount and terms of the loan agreement. The borrower signs the loan agreement, which is a written promise to pay back the loan.

Deeds of Trust are part of the paperwork involved in buying property in many states. They include important sections including the power of sale, payment terms, tax and insurance requirements, and promissory note. You can also designate a trustee, often an attorney or title company, to hold the land title until the loan is paid off.

• Not all states recognize a Trust Deed. Use a Mortgage Deed if you live in: Connecticut, Delaware, Florida, Indiana, Iowa, Kansas, Louisiana, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Vermont, or Wisconsin.
• A Deed of Trust is not used to transfer property to a living trust (use a Quitclaim Deed for that).
• Other than sounding the same, Deeds of Trust and Living Trusts have virtually nothing in common.

When to use a Deed of Trust:

• You're loaning money to another person or business and want to hold an interest in certain property they own as security until they repay their debt.
• You're borrowing money and want to offer your property as security to the lender.
• You are selling a property in a Deed of Trust state.
• You are wanting to buy property in a Deed of Trust state.