What you need to Know about Trust Deeds

ISLAMORADA, Fla. - June 12, 2017 - PRLog -- Per Jan Keller, Top Producing Real Estate Agent for Coldwell Banker Schmitt Real estate and owner of Kellerporterteam.com-Everything about Real Estate in Islamorada and the Upper Keys,"Trust deeds, also known as "deeds of trust," are simply a collateral agreement. Like traditional mortgage instruments, trust deeds assign asset collateral in a real estate contract.

For instance, when a person finances a house with a home loan, he or she is pledging that particular property as collateral. The residence serves as a guarantee of payment to the lender. If he or she as a borrower fail to pay their monthly mortgage obligation, the lender goes through a legal process to possess the property. This is the foreclosure process and it differs from state to state.

So, how do trust deeds differ from traditional mortgages? The answer is, a third-party is involved in the deal. In a traditional mortgage, the titled to the borrower (which is why the lender must use the foreclosure process to claim legal possession). However, trust deeds assign the title to trustees, hence the name.

The trustee receives title to the property being financed. Usually, this is a form of seller or owner financing. The owner of the property puts the title in the name of a trustee. Typically, the buyer, who is also a borrower, pays a predetermined sum until the "loan" is paid in-full (or reaches certain criteria).

You might wonder, what are the advantages of a trust deed? And, when are these agreements used?

Here are some benefits of trust deeds:

• Optional down payment. When a deed of trust is used between a seller and buyer, there does not have to be a down payment. However, there typically is a down payment to serve as a confirmation to the seller of the buyer's seriousness.
• Optional credit check. With trust deeds, there is no real need for a credit check. Although, this does not mean the seller will not conduct a credit check, it could be unnecessary.
• Competitive interest rate. The seller can offer a low interest rate, which is comparative or less expensive than a traditional lender. It's also possible to negotiate a low interest rate.
• No lender restrictions.  Most lenders have restrictions in place, which limit the number of qualified buyers. But with deeds of trust, these are optional.
• For more information about Buyng Islamorada Real Estate including Luxury Homes for sale in the Upper Florida Keys, please contact Jan at http://www.islamoradajan.com