Real estate agents should be familiarized with the basic terms used when referring to mortgages, the various types of notes and mortgages, and the clauses in the notes and mortgages.

Amortization – The liquidation of a debt by installment payments

Mortgagor – the borrower

Mortgagee – the lender

Note – a promise to pay. The note recites the parties, property description. and basic term of the loan

Deed of Trust – an instrument signed by the mortgagor, that pledges the property as collateral for the repayment of the note. There are three parties in the deed of trust, the trustor (the borrower), the beneficiary (the lender), and the third party (trustee). The trustee enforces the term of the Deed of Trust.

Mortgage – an interest in land to secure repayment of a debt. There are two parties, the mortgagee (the lender) and the mortgagor (the borrower).

Hypothecation – the pledge of property as collateral for a debt.

Trustor – one who creates a trust

Trustee – One who holds a property in trust for the benefits of another.

Beneficiary – the entity for whom a trust is created

Lien theory states – it is the consideration of mortgage to be a lien and allow the title to remain with the mortgagor – the borrower