Michigan Real Estate Exam Practice Question
What is the function of a promissory note when used in conjunction with a mortgage?
Correct Answer: C
Rationale: A promissory note outlines the borrower's promise to repay the loan, detailing terms like interest and repayment schedule, which are essential for validating the mortgage.
Option A is incorrect because a legal description of the property is typically found in the mortgage document, not the promissory note.
Option B is misleading; while recording a mortgage is important for establishing priority, the promissory note itself does not require recording to be enforceable.
Option D inaccurately limits the role of the promissory note to foreclosure rights; it primarily serves to establish the borrower's obligations, not just the lender's rights in case of default.
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