What is a legal document that pledges a property to the lender as security for payment of a debt?

What is a legal document that pledges a property to the lender as security for payment of a debt?

• A. Deed
• B. Mortgage
• C. Lease
• D. Title

Answer: (B)

The correct answer is a mortgage, which serves as a legal document that pledges real estate to a lender as security for the repayment of a loan. When a borrower takes out a loan to purchase property, the mortgage creates a lien on the property in favor of the lender. This means that the lender has a financial interest in the property and can take possession of it through foreclosure if the borrower fails to meet their loan obligations. A deed is a document that conveys ownership of a property from one party to another and does not serve as collateral for a loan. A lease pertains to the rental of a property and outlines the terms between a landlord and a tenant, rather than establishing any obligation related to a debt. Title refers to the legal ownership and rights associated with a property but does not constitute a pledge to secure a debt. Thus, the mortgage is specifically designed to meet the needs of securing repayment for a loan, making it the correct answer in this context.

The correct answer is a mortgage, which serves as a legal document that pledges real estate to a lender as security for the repayment of a loan. When a borrower takes out a loan to purchase property, the mortgage creates a lien on the property in favor of the lender. This means that the lender has a financial interest in the property and can take possession of it through foreclosure if the borrower fails to meet their loan obligations.

A deed is a document that conveys ownership of a property from one party to another and does not serve as collateral for a loan. A lease pertains to the rental of a property and outlines the terms between a landlord and a tenant, rather than establishing any obligation related to a debt. Title refers to the legal ownership and rights associated with a property but does not constitute a pledge to secure a debt. Thus, the mortgage is specifically designed to meet the needs of securing repayment for a loan, making it the correct answer in this context.