Which document outlines the terms of a mortgage loan, including the principal amount, interest rate, and repayment schedule?

• A. Deed of Trust
• B. Promissory Note
• C. Mortgage
• D. Loan Agreement

Answer: (B)

The promissory note is the document that states how much is borrowed, the interest rate, and the repayment schedule. It is the borrower’s formal promise to repay the loan under the specified terms, including the principal amount, the interest rate, payment amounts, due dates, and the loan’s maturity. This note creates the actual debt obligation.

The security instrument—whether a deed of trust or a mortgage—serves a different purpose: it provides a lien on the property to secure that promise and explains remedies if you default. It doesn’t typically lay out the repayment terms in detail. A loan agreement can outline terms in some contexts, but for residential mortgages, the promissory note is the primary document that defines the debt terms.