A lender in Wichita, Kansas provides a $250,000 loan to help Maria purchase a home. The loan documents include a promissory note and a separate document that pledges the property as collateral. What is the document pledging the property called under Kansas law?
Correct Answer
B) Mortgage
Kansas is a mortgage state. The document pledging Maria's property as collateral for the $250,000 loan is called a mortgage. It is a two-party instrument between the borrower (mortgagor) and the lender (mortgagee). The promissory note evidences the debt, while the mortgage secures it against the real property.
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Related Topics & Key Terms
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Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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