A loan processor is checking which closing document contains the principal amount, the interest rate, the payment dates, and the repayment term. Which document should the processor review first?
Correct Answer
C) The promissory note because it states the debt terms
The promissory note sets out the core debt terms, including the amount borrowed, interest rate, payment schedule, and maturity. That is the document the processor should review first for repayment details.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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