A deed of trust is a legal document that transfers ownership of real property (real estate) to a trustee until the person or entity buying the real property repays a loan for the purchase of the real property. A deed of trust is similar to a mortgage—some states use a mortgage and other states use a deed of trust.

In a deed of trust transaction a lender (the bank) gives a borrower (who is purchasing the real property) money to pay the seller, and the borrower gives the lender one or more promissory notes for repayment of the loan. As security for the promissory notes, the borrower transfers the ownership interest (title) in the real property to a trustee—often a title company—to hold until the borrower repays the lender.

If the borrower fails to timely make payments and defaults on the loan, the property generally may be sold without the lender using or going through the court system. This is known as nonjudicial foreclosure and is usually less time-consuming and less expensive for the lender.

A deed of trust is also known as a trust deed, a trust indenture, an indemnity mortgage, or a common-law mortgage.

In New Hampshire, the primary legal instrument used for securing a loan for the purchase of real property is a mortgage, not a deed of trust. When a borrower takes out a loan to buy property, they sign a mortgage agreement, which gives the lender a security interest in the property. This means that if the borrower defaults on the loan, the lender can foreclose on the property to recoup the unpaid loan amount. Foreclosure in New Hampshire typically involves a judicial process, meaning the lender must go through the court system to foreclose on the property. Unlike states that use deeds of trust, which can allow for nonjudicial foreclosure, New Hampshire requires court involvement, providing borrowers with certain legal protections and a chance to contest the foreclosure. It's important for borrowers in New Hampshire to understand that while the term 'deed of trust' may be used in other states with different implications, in New Hampshire, the mortgage is the relevant legal document for real property loans.