What type of mortgage secures both real and personal property?

The correct answer is the deed of trust. A deed of trust is a financial instrument used to secure a loan, which can encompass both real property (such as a house or land) and personal property (such as furniture or appliances). This type of arrangement typically involves three parties: the borrower (trustor), the lender (beneficiary), and a third-party trustee who holds the title until the loan is paid off.

What distinguishes a deed of trust is its capability to encumber personal property along with real estate. This feature makes it suitable for transactions where personal property is involved, in addition to the typical real estate being financed.

In contrast, a conventional mortgage primarily secures real property only and does not typically include personal property. Home equity loans generally allow homeowners to borrow against their home’s equity and usually pertain to real property. FHA loans are government-backed mortgages designed specifically for low- to moderate-income borrowers, again focused on real property exclusively. Thus, the deed of trust stands out as the correct choice for securing both real and personal property.