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A warranty deed or quit claim deed TRANSFERS TITLE or OWNERSHIP of real property. When you purchase property, you usually receive a warranty deed from the seller to you to show that you now own the property.
A deed of trust is an agreement between a home buyer and a lender at the closing of a property. The agreement states that the home buyer will repay the home loan and the mortgage lender will hold the property's legal title until the loan is paid in full.
A warranty deed ensures a buyer that the property is owned by the seller and is able to be sold without any encumbrances. A deed of trust is used in certain states, and represents a buyer's guarantee with their lender to repay the property loan as scheduled.
In Colorado, real estate purchases in which the purchaser borrows money to pay for property are typically secured with a Deed of Trust. Rather than a mortgage in which the parties are the borrower and the lender, a Deed of Trust is a three-party agreement among a borrower, a lender, and the county Public Trustee.
A deed of trust (also known as a trust deed) is a document sometimes used in financed real estate transactions, generally instead of a mortgage.
A deed of trust is a legal agreement that's similar to a mortgage, which is used in real estate transactions. Whereas a mortgage only involves the lender and a borrower, a deed of trust adds a neutral third party that holds rights to the real estate until the loan is paid or the borrower defaults.
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.
(1) Except as provided in sections 3839-202 and 38-39-204, any lien upon property created by a mortgage or deed of trust shall cease to be a lien fifteen years after the date on which the final payment or performance of the obligation secured thereby is due as shown by such mortgage or deed of trust recorded in the ...