Which document represents the borrower's promise to repay the loan?

Which document represents the borrower's promise to repay the loan?

• A. Mortgage
• B. Deed of Trust
• C. Escrow Agreement
• D. Promissory Note

Answer: (D)

The key idea is that the document that creates the borrower’s duty to repay is the promissory note. It is the actual debt instrument: a written promise to repay a specific amount, with details like the interest rate, payment schedule, due date, and signatures of the borrower and lender. This note represents the borrower’s personal obligation to repay the loan. A mortgage or deed of trust serves a different role: it secures that debt by giving the lender a lien on the property. They authorize foreclosure if the loan isn’t repaid but do not themselves constitute the promise to repay. An escrow agreement is unrelated to the debt itself; it typically governs the handling of funds for taxes, insurance, or other costs and does not create or secure the loan obligation.

The key idea is that the document that creates the borrower’s duty to repay is the promissory note. It is the actual debt instrument: a written promise to repay a specific amount, with details like the interest rate, payment schedule, due date, and signatures of the borrower and lender. This note represents the borrower’s personal obligation to repay the loan.

A mortgage or deed of trust serves a different role: it secures that debt by giving the lender a lien on the property. They authorize foreclosure if the loan isn’t repaid but do not themselves constitute the promise to repay.

An escrow agreement is unrelated to the debt itself; it typically governs the handling of funds for taxes, insurance, or other costs and does not create or secure the loan obligation.