Which instrument is used to pledge real property as security for a loan?

• A. Promissory Note
• B. Mortgage
• C. Deed
• D. Lien

Answer: (B)

When you pledge real property as security for a loan, you use a document that attaches the loan to the property itself. That document is a mortgage. It creates a lien on the real estate in favor of the lender, meaning the property serves as collateral for repaying the debt. Because it’s recorded, it provides public notice of the lender’s security interest. If the borrower defaults, the lender can initiate foreclosure to recover what’s owed from the property’s value.

A promissory note, by contrast, is just the borrower's promise to repay the debt and does not encumber the property. A deed transfers ownership of the property, not serve as security for a loan. A lien is a claim against the property, but it isn’t the instrument itself that pledges the property for the loan; it’s typically created by a mortgage (or similar security instrument).