What is the primary difference between a deed and a mortgage?

The primary difference between a deed and a mortgage lies in their fundamental purposes and functions. A deed serves as a legal document that conveys ownership of property from one party to another. This means when a deed is executed and delivered, the ownership of the property is transferred to the grantee, establishing their rights over the property.

On the other hand, a mortgage is fundamentally a financial instrument rather than a title-transfer document. It represents a loan agreement where the borrower secures financing to purchase property, with the property itself acting as collateral for the loan. In essence, while ownership is passing hands with a deed, a mortgage involves a pledge of the property to secure a debt without transferring ownership.

This understanding highlights the distinct roles that each document plays in real estate transactions: the deed is about ownership transfer, while the mortgage pertains to securing financing.