Loan instruments
Mortgage
The instrument pledging property as security for a debt
Two documents do the work of a home loan and they are routinely confused. The promissory note is the promise to repay; the mortgage is the security instrument that lets the lender reach the property if the promise is broken. The borrower is the mortgagor, the lender the mortgagee.
How the exam asks about it
Note first, mortgage second — the note creates the debt and the mortgage secures it. A question asking what actually obliges the borrower to pay is asking about the note.
Related terms
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