Quick answer
A deed of trust is the document that makes your home security for a loan in many states, used in place of a mortgage document. It involves three parties — you, the lender and a neutral trustee — and usually gives the trustee a power of sale, so the home can be sold if you don’t repay.
Three parties instead of two
| Role | Mortgage | Deed of trust |
|---|---|---|
| You, the borrower | Mortgagor | Trustor |
| The lender | Mortgagee | Beneficiary |
| Neutral third party | None | Trustee, often a title company or attorney |
Either way, the debt itself is in the promissory note; the deed of trust or mortgage is what creates the lien on the home. Both are signed at closing and recorded in the county land records.
Why the difference matters
Foreclosure. A power-of-sale clause lets the lender foreclose without going to court in states that allow non-judicial foreclosure, following notice and sale steps set by state law. A mortgage can carry a power of sale too, but in many states that use mortgages, foreclosure goes through the courts. Which document your state uses, and the procedures, are matters of state law.
Payoff. When the loan is repaid, the trustee issues a deed of reconveyance releasing the home, and it is recorded. Check your county records a few weeks after payoff to confirm it was filed. The step-by-step buying guide shows where this document fits in a purchase.
Sources
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.