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The Difference Between a Deed Trust and a Mortgage in Illinois

By Tiffany Raiford

When dealing with real estate in Illinois, you'll become familiar with the terms deed trust and mortgage. Each, of course, means something different. However, understanding the difference between the two makes real estate dealings that much simpler and more convenient for all involved parties. A deed trust is not the same thing as a mortgage, but the two are closely related.

A Deed Trust

In Illinois, a deed trust is a form that involves a trustee and a trustor, as well as a lender. When a trustor, also known as a borrower, purchases a home, the real title of the property is presented to the trustee. The trustee holds the title as security for a loan even though the trustee is not the lender. The borrower is given custody of the equitable title, but the legal title remains with the trustee until the lender is paid in full by the borrower.


When dealing with a mortgage in Illinois, there is no third party. What this means is that the trustee is completely removed from the situation. The lender of a mortgage provides the borrower with the legal title as well as the equitable title. The borrower is still responsible for adhering to the terms and conditions of the mortgage, which involves paying the monthly payment in full and eventually paying off the loan to the lender.

The Difference

The difference is simple when it comes to a deed trust a mortgage in Illinois. When you enact a deed trust, you will have a third party involved. When you choose to go the route of a common mortgage, the third party is eliminated. What doesn't change between the two is the equitable title and its possession and the fact that the borrower is always responsible for the repayment of the loan used to purchase a piece of property.

Should you choose to purchase a home in the state of Illinois or even obtain a real estate license, you will need to know the difference between a deed trust and a mortgage. Knowing the difference not only makes it easier for you to complete the process of the purchase of your home, it makes it easier for you to understand the many different real estate terms bandied about when a home is on the market. Even if you aren't interested in one or the other, knowing what it is and how it differs is always advantageous.

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