Which document evidences the loan obligation in a mortgage transaction?

• A. Deed of trust
• B. Appraisal
• C. Promissory note
• D. Title report

Answer: (C)

The main idea is that the loan obligation—the borrower’s promise to repay—comes from the promissory note. This note spells out how much was borrowed, the interest rate, the repayment schedule, and the due date. It’s the instrument that creates the debt and lays out the borrower's binding obligation to repay.

The security for that obligation is provided by a separate document, like a deed of trust or mortgage, which gives the lender a lien on the property if the loan isn’t repaid. The title report just verifies who owns the property and any existing liens, while the appraisal estimates the property's value. So the promissory note is the document that evidences the loan obligation.