What is a Mortgage?

What is a Mortgage?

A mortgage is a written instrument that creates a lien upon real estate as security or collateral for the repayment of a specified debt. An instrument is a written legal document created to define the rights and liabilities of the parties involved. A mortgage differs from a deed of trust, because there are only two parties involved in a mortgage. A deed of trust is also an instrument however it includes a third party (known as a trustee) in which legal title of the real estate is vested to secure the repayment of the loan. Despite this difference a mortgage and deed of trust are considered similiar instruments, both designed to meet the same demand. Depending on which state you reside in usually determines which type of instrument is used when securing financing.

…back