New Jersey Real Estate Practice Exam Free Practice Question
What is the function of a promissory note or bond when used in conjunction with a mortgage?
Correct Answer: B
Rationale: A promissory note or bond serves to make the borrower personally obligated to repay the loan amount, ensuring accountability in the mortgage agreement.
Option A is incorrect because a legal description of the property is typically found in the mortgage document itself, not in the promissory note.
Option C is also wrong; while a mortgage must contain certain elements to be valid, the promissory note primarily focuses on the borrower's promise to repay.
Option D misrepresents the nature of the promissory note, as it does not limit the lender's rights to only interest in case of default; rather, it secures the entire debt owed.
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