Arizona Real Estate
What Is a Deed of Trust in Arizona?
Arizona uses Deeds of Trust instead of traditional mortgages for most real estate financing. Here's what that means for you.
3 Parties
Trustor, beneficiary, and trustee, the structure that defines every Arizona Deed of Trust.
Why Arizona Uses Deeds of Trust
Unlike a traditional two-party mortgage, an Arizona Deed of Trust involves three parties: the trustor (borrower), the beneficiary (lender), and the trustee (a neutral third party who holds legal title until the debt is repaid).
This structure allows Arizona lenders to foreclose through a non-judicial process , meaning the trustee can sell the property without a court case, if the borrower defaults. That's faster and less costly than judicial foreclosure, which is why most Arizona real estate loans use this structure instead of a conventional mortgage.
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Common Questions
What Arizona Buyers Ask Us
Is a Deed of Trust the same as a mortgage?
They serve the same purpose, securing a loan against real property, but the legal structure differs. Arizona is a Deed of Trust state, meaning most residential real estate loans use a Deed of Trust rather than a traditional mortgage.
Who are the parties in an Arizona Deed of Trust?
Three parties are involved: the trustor (borrower), the beneficiary (lender), and the trustee (a neutral third party who holds legal title until the loan is repaid).
What happens if the borrower defaults?
Because a Deed of Trust includes a trustee, Arizona lenders can typically foreclose through a non-judicial process, which is generally faster than the judicial foreclosure required with a traditional mortgage.
Do I need an attorney to prepare a Deed of Trust?
For a standard private loan between two parties, a properly drafted template can cover the essential terms. Complex commercial financing or disputed transactions are better handled with an attorney's review.