All About Deeds of Trust
You’ve just made the decision to purchase a home! First things first. Find the perfect property for you, make an offer that will be accepted by the seller, and finally secure financing.
When it comes to financing buyers will use either a mortgage or a deed of trust. These are the names of the document’s buyers will use to secure financing. Both works similarly, but not the same. Certain states require buyers to use only one and other states, such as Arizona allow either. The biggest distinction between the two is the number of parties involved. A deed of trust has three parties and a mortgage has only two.
The three parties in a deed of trust are the borrower, the lender, and the trustee. The borrower is also referred to as the trustor and is the person purchasing the property and in need of a loan. The lender is either a legal entity or an individual who provides the loan. The trustee is a neutral third-party who holds the deed to the house and is ultimately responsible for the repayment of the loan. If the borrower defaults on the loan it is the trustee who would sell the property and repay the loan. The trustee is the party that handles the foreclosure process.
Once the loan is repaid the trustee is responsible for transferring the title of the property to the borrower. For this, the trustee must file a Deed of Reconveyance that shows the debt was paid. The Deed of Reconveyance is filed with the local county recorder of deeds registry. If not done within 30 days of the final payment a penalty will be issued.
Who is allowed to be a trustee?
Certain states have legislation describing the required qualifications. You can find this out by simply checking your local laws. Some states have no requirements for who can serve as a trustee to a deed of trust.
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
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About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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