Finance
Which document in an Alabama mortgage transaction is the borrower's personal promise to repay the debt?
AThe mortgage
BThe deed of trust
CThe promissory note✓ Correct
DThe title insurance policy
Explanation
The promissory note is the borrower's personal promise to repay the debt. The mortgage is the security instrument that pledges the property as collateral.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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