Question

At the closing, the lending institution that loans money to a buyer usually will require the buyer to sign

A. a promissory note and the mortgage.

B. the settlement form and the affidavit of title.

C. the affidavit of title and the mortgage.

D. the RESPA form and the settlement form.

Answer 1

The lending institution typically requires a buyer to sign a promissory note and mortgage at closing to guarantee loan repayment and to allow the property to be seized and sold if the borrower defaults.

Step-by-step explanation:

At the closing, the lending institution that loans money to a buyer usually will require the buyer to sign a promissory note and the mortgage. A promissory note is a written promise to repay the borrowed amount, whereas the mortgage is a legal document that secures the promissory note and provides the lender with a claim against the borrower's property if the borrower fails to meet the terms of repayment. This ensures that the lending institution has two forms of security - the promise to pay back the money in the form of a promissory note and the right to seize and sell the property, which is stated in the mortgage agreement, should the borrower default on the loan.