To review, here are the key ways a mortgage and deed of trust are similar as well as different. Both a warranty deed and deed of trust are used to transfer the title of a property from one person to another. However, the difference between these two contracts is who is protected. As you now know, a deed of trust protects the beneficiary lender. A warranty deed, on the other hand, protects the property owner.
When a property title is transferred with a warranty deed, ownership goes from the seller also known as the grantor to the buyer also known as the grantee. The warranty deed guarantees that the previous owners, or grantor, had full ownership of the property and right to transfer it. It provides peace of mind that you own the property outright once the title is in your name. Casey Bond is a seasoned personal finance writer and editor.
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Casey Bond, Mike Cetera. Contributor, Editor. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations. What Is a Deed Of Trust? The three parties involved in a deed of trust for a real estate transaction are a: Trustor. This is the person whose assets are being held in the trust, also known as the borrower i. The previous owner signed the deed granting his interest in the property to you.
The deed was then filed on public record and you are now considered the homeowner. The deed established how you hold the title, or how it's vested.
For example, you can hold a property solely as an individual or jointly with someone else like a spouse. The deed is the document that actually transfers and shows evidence of ownership.
The title reflects the deed transfers for a piece of property. As a homeowner, you should have the original, or a copy of the deed. You can have a copy of the title report, but it's not a formal document. When a mortgage loan is used to finance the purchase of a home, the lender uses the house itself as collateral. This document should state that the buyer has no further obligation and the loan has been paid in full.
This should be enough to start the process of putting the actual deed in your hands. In normal circumstances, you should receive the deed in the mail a couple of weeks after the release is filed.
In some cases lenders fail to release their liens, so you might need to give them a call. The lender should have a release of lien department. They can research your account and deal with filing the appropriate paperwork. The terms title and deed are often thought of as the same thing, but their legal meaning is quite different.
The easiest way to think about the difference between the two is a title is a legal way of showing that you own the rights to something full or partial , while deeds on the other hand, are actually the legal documents that transfer title from one person to another.
Additionally, the documents that you obtain after your real estate purchase will differ depending on whether you live in a title theory state or a lien theory state. When you own a property entirely, you will possess both the deed and title.
Title vs Deed - Is There a Difference? April 22, Share on Facebook. Follow us. A title is the legal right to use and modify the property how you see fit, or transfer interest or any portion that you own to others via a deed. A deed represents the right of the owner to claim the property. As opposed to the title, that describes who is the ultimate holder of the property.
This is a search of public records that affect the ownership title of the property. The public records that will be searched are previous deeds, mortgages, paving assessments, liens, wills, divorce settlements, etc.
The settlement agent will then prepare all documents and schedule the closing. Included in these closing documents is the deed. During closing the seller signs the deed, transferring the title and ownership of the property. Additionally, the buyer will sign the new note and mortgage and the old loan is paid off. Questions about deciphering the difference between title and deed? A mortgage banker can help you every step of the way. The views and statements expressed are deemed reliable as of the publish date indicated and may not be accurate or reliable at any future date.
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