FinancingMortgage_instrumentsEASY
At a Friday closing, Marcus Hill signs a note, a deed, and a mortgage. The lender later explains that one of those documents gives the home as collateral and allows foreclosure if Marcus defaults. Which document is the lender describing?
Correct Answer
A) The mortgage, also called the security instrument
The mortgage, also called the security instrument in many closings, pledges the property as collateral for the loan. By signing it, Marcus gives the lender foreclosure rights if the debt is not repaid according to the note.
Answer Options
A
The mortgage, also called the security instrumentB
The deed transferring ownership from the seller to MarcusC
The promissory note stating the repayment obligationD
The Closing Disclosure itemizing final settlement chargesWhy This Is the Correct Answer
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Why the Other Options Are Wrong
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Real World Application in Financing
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Related Topics & Key Terms
Key Terms:
security_instrumentmortgageforeclosure_rightsclosing_documents
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