In this video:
A deed of trust is different from a mortgage due to the number of parties involved and how the lender can resolve an unpaid loan. If the borrower can’t pay a mortgage, then the lender forecloses. If a loan isn’t repaid with a deed of trust, then it is the responsibility of the trustee. A trustee is a third party, usually an escrow company that pays.
If the borrower can’t pay the mortgage, then it goes through a traditional court process. This is known as a judicial foreclosure. This requires the lender to file a lawsuit. If a deed of trust is the instrument used, then the court process is bypassed. This is known as a non-judicial foreclosure. It is usually a lot faster and less costly. For typical investors and homeowners, this is the better route to choose in selling property. The terms of the procedures are usually laid out in the deed of trust which are subject to state law.
The promissory note will give; the terms of the loan, loan amount, interest rate, payment schedule, etc. Usually the deed of trust attests the home is worth more than the amount loaned to protect from default. This is usually a given. You cannot get a deed of trust and promissory note for more than the home is worth just in case you do go into default. The home is the collateral. When using this type of instrument, confirm the loan amount and price of the home are beneficial to the buyer and the seller even in case of default.
When you are closing with a promissory note and deed of trust, it is imperative that a clear title search is completed to ensure the taxes are current. It’s important there are no other outstanding loans or debts against the home.
There are many negotiable items, such as term of the loan, and interest.
To do a promissory note we need to have all parties to the transaction sign and notarize the necessary documents. It then has to be recorded in Bexar county for it to be valid.
A note is basically an IOU that contains the promise to repay the loan. White the mortgage or deed of trust is the document that pledges the property as security for the loan.
Between a warranty deed and a deed of trust are that a warranty deed transfers property ownership from current owner to new buyer. And deed of trust ensures that the interest in the property has the lender at best interest in the event the buyer defaults on a loan.
We are a San Antonio Real Estate Law firm that offers fixed fee rates for a variety of legal transaction services, including Owner Finance & Wraparound Closings, Foreclosures, Deeds & Releases, Real Estate Contracts, Title Issues & Judgments, Wills & Estates, Probate & Administration, & LLC Formations. If you need help assessing your case give our office a call.
Victor has been doing real estate transactions as a lawyer since 2002 & as an investor himself since 2003. There are a lot of nuances with real estate & we hope that if you have any questions to contact us during regular business hours. Along with being a Real Estate Attorney, Victor is also a Real Estate Broker, making his expertise long standing & efficient.
We are a San Antonio Real Estate Law firm that offers fixed fee rates for a variety of legal transaction services, including Owner Finance and Wraparound Closings, Foreclosures, Deeds and Releases, Real Estate Contracts, Title Issues and Judgments, Wills & Estates, Probate and Administration, and LLC Formations. If you need help assessing your case give our office a call.
Victor has been doing real estate transactions as a lawyer since 2002 and as an investor himself since 2003. There are a lot of nuances with real estate and we hope that if you have any questions to contact us during regular business hours. Along with being a Real Estate Attorney, Victor is also a Real Estate Broker, making his expertise long standing and efficient.
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Located on IH-10 Between Huebner & De Zavala off Woodstone: 11815 W IH-10 #107, San Antonio, TX 78230
Located on IH-10 Between Huebner & De Zavala off Woodstone: 11815 W IH-10 #107, San Antonio, TX 78230
Fields marked with an * are required
Located on IH-10 Between Huebner & De Zavala off Woodstone: 11815 W IH-10 #107, San Antonio, TX 78230