Deed of Trust

• A deed of trust is almost the same thing as a mortgage. It is created when the property is transferred and your financial lender will hold onto the original. When you pay off your obligation, you will receive the original and the promissory note committing you to paying for the property from the lender. Just like a mortgage, a deed of trust can be lengthy as it outlines all conditions of the sale, including what happens if you are in default with your payments.
  
  

Deed of Trust or Mortgage?

• Because they are similar, the state where you buy property may use either a deed of trust or a mortgage to finance sales. So if you live in a state that uses mortgages, you might not ever see a deed of trust. However, both documents are recognized in every state. Neither a deed of trust or a mortgage offers you more protection than the other.
  
  

Warranty Deed

• A warranty deed is a type of property deed that helps ensure that the person selling property is the sole owner and that there aren't any liens or encumbrances on the property. Of the four types of property deeds that do this, the warranty deed is the strongest. It guarantees that the property has not be sold to someone else, that the owner has the right to sell the property, that it has no encumbrances or liens against it and that the title is free and clear and the current seller will defend it if need be. Though accepted throughout the country, warranty deeds are generally used in property transactions in the Midwest and on the East Coast.
  
  

Advantage of a Warranty Deed

• The biggest advantage of a warranty deed is that the property seller agrees to defend the fact that the title is free and clear. This means the seller is putting his finances on the line to ensure the sale, which is an additional level of security for the buyer that other property deeds don't have. It's not something every property transaction needs, but for real estate that has been sold and resold over and over again, it is probably a necessity.