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In this tutorial on North Carolina real estate, a deed of trust is defined as a legal security instrument where a borrower pledges real estate as collateral for a loan, typically seen in the context of a promissory note. In simpler terms, when someone borrows money to buy a house, they agree that if they fail to repay, the lender can foreclose on the property. The phrase “if you don’t pay, you don’t stay” emphasizes that ownership of the house hinges on consistent repayment. It's important to note that a deed of trust is different from a deed; the former secures the loan, while the latter represents legal title to the property.
