FinanceQuestion 83 of 120
A mortgage is best described as which type of instrument in the financing process?
a.A security instrument that pledges property as collateral for a debt
b.The promise to repay the debt itself
c.A deed transferring full ownership to the lender
d.A lease of the property to the lender
Explanation
A mortgage is the security instrument that pledges real property as collateral for a loan, creating a lien. The promissory note is the separate document that contains the borrower's promise to repay. Together, the note and mortgage document the loan obligation and its security.
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