Which document is used to convey property ownership during a mortgage transaction?

In a mortgage transaction, the document that is primarily used to convey property ownership is a deed of trust. This legal instrument establishes the relationship between the borrower, the lender, and a third party known as a trustee. When a borrower secures a loan to purchase real estate, the deed of trust allows the lender to hold a security interest in the property being financed. This means that if the borrower defaults on the loan, the lender can foreclose on the property to recover the outstanding debt.

The deed of trust functions by transferring the title of the property to the trustee, who holds it for the benefit of the lender until the borrower pays off the mortgage loan. Once the loan is satisfied, the trustee will then reconvey the title back to the borrower, effectively demonstrating that the borrower is the full owner of the property.

Other options serve different purposes in the mortgage process. A promissory note is a written promise to repay the loan and outlines the terms of the loan but does not convey ownership. A purchase agreement is a contract between the buyer and the seller that outlines the terms of the sale but typically is not related to the financing aspect. A mortgage application is simply the form filled out by the borrower seeking a loan and does not convey ownership at