Real Estate Financing Terms
Written on March 13, 2008
A Mortgage is the common word for a real estate loan even though technically there are two types of real estate loans, mortgages and deeds of trust. The difference is beyond the scope of this lesson. It is enough to say that because of the different laws between the states, some states refer to real estate loans as mortgages other states refer to them as deeds of trust.
A Deed of Trust is the other form of a real estate loan although it is commonly referred to as a mortgage even by experienced people in the industry. For the sake of simplicity when the word “mortgage” is used in this lesson, it is referring to either a mortgage or a deed of trust depending on the state law for your office.
A Promissory Note is the form that states the terms of the loan. While mortgages are filed at the courthouse, promissory notes are not. In a sense mortgages are the teeth that attach a promissory note to a property.
Filed in: Financing.