Any Transferable Interest Qualifies
This statute establishes a broad rule: if you can legally transfer an interest in real property, you can mortgage it. That includes full ownership, partial interests, life estates, and other recognized property rights. The key requirement is that the interest must be capable of being transferred.
Any interest in real property capable of being transferred may be mortgaged.
A.R.S. § 33-701(A)This flexibility matters for estate planning because families hold property in many different ways. Whether you own a home outright, hold a fractional interest with siblings, or have a life estate, the law allows that interest to serve as collateral for a loan.
Formal Requirements for a Valid Mortgage
A mortgage is not a casual agreement. Arizona requires it to be created in writing and executed with the same formalities as a deed. It may also be acknowledged, certified, and recorded, just like a property grant.
A mortgage may be created, renewed or extended only by writing executed with the formalities required of a grant of real property, and may be acknowledged, certified and recorded in like manner and with like effect.
A.R.S. § 33-701(B)When a mortgage is recorded, it becomes part of the public record, which helps protect both the borrower and the lender. For families transferring property into a living trust, understanding mortgage formalities is essential. A mortgage on trust-held property must still follow these same written requirements.
