Once you have purchased your home, one of the documents you will sign when you go to closing is called a Deed of Trust. As with some of the documents you will receive, many homeowners typically are unaware of exactly what this important document is. A Deed Of Trust is the security for your loan. It is the document that is recorded in the public records.  A deed of trust contains three parties:

•The Trustor, which is the borrower

•The Trustee, which is an entity that holds "bare or legal" title

•The Beneficiary, which is the lender


The deed of trust identifies the following:

•Original loan amount

•Legal description of the property being used as security for the Home Financing

•The parties

•Inception and maturity date of the loan

•Provisions of the Home Financing and requirements

•Late fees

•Legal procedures

•Acceleration and alienation clauses

•Riders, if any, regarding such clauses as prepayment penalties or terms of an adjustable rate Home Financing

Before you sign a Deed of Trust be sure to read all the fine print and pre-printed portions. It is a good idea to request a blank copy of the deed of trust beforehand to review. When you do go to closing be sure to make sure everything is correct before signing. Things such as the principal balance of the loan, the interest rate, and any pre-payment penalties should be reviewed for accuracy.