Which instrument pledges the property as collateral to secure a mortgage loan?

Which instrument pledges the property as collateral to secure a mortgage loan?

• A. Promissory Note
• B. Security Instrument (Mortgage or Deed of Trust)
• C. Title Commitment
• D. Appraisal

Answer: (B)

When a loan is secured by real estate, the document that creates the lien on the property is the security instrument—the mortgage or deed of trust. This instrument pledges the property as collateral and is recorded against the title, giving the lender a legal claim to the property if the borrower defaults and enabling foreclosure if needed. The promissory note, by contrast, is the borrower's promise to repay the loan and outlines terms and amount but does not encumber the property by itself. A title commitment shows the status of the title and any defects; it doesn’t pledge collateral. An appraisal assesses value and informs underwriting, not security of the loan.

When a loan is secured by real estate, the document that creates the lien on the property is the security instrument—the mortgage or deed of trust. This instrument pledges the property as collateral and is recorded against the title, giving the lender a legal claim to the property if the borrower defaults and enabling foreclosure if needed. The promissory note, by contrast, is the borrower's promise to repay the loan and outlines terms and amount but does not encumber the property by itself. A title commitment shows the status of the title and any defects; it doesn’t pledge collateral. An appraisal assesses value and informs underwriting, not security of the loan.