Finance
In South Dakota, the 'note' in a mortgage transaction is the:
ADeed of trust or mortgage (security instrument)
BThe promissory note — the borrower's personal promise to repay the loan✓ Correct
CThe title insurance commitment
DThe lender's commitment letter
Explanation
The promissory note is the borrower's personal, written promise to repay the debt. The mortgage or deed of trust 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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