Which document specifies the terms under which a borrower must repay a mortgage loan?

The promissory note is the key document that specifies the terms under which a borrower must repay a mortgage loan. It is a legally binding agreement in which the borrower formally acknowledges the debt to the lender and outlines the conditions for repayment, including the loan amount, interest rate, repayment timeline, and any applicable fees or penalties for late payments. This document serves as evidence of the borrower's commitment to repaying the loan and provides the lender with the legal right to seek repayment if necessary.

While the loan agreement and mortgage document are important in the overall borrowing process, the loan agreement generally encompasses a broader set of terms and conditions beyond just the repayment specifics. The mortgage document actually delineates the lender's interest in securing the loan with the property but does not detail the repayment terms. A repayment schedule, while important for outlining specific payment dates and amounts, is not the primary document that establishes the borrower's obligation to repay the loan; rather, it is derived from the promissory note. The clarity and specificity provided by the promissory note are essential for both parties involved in the mortgage transaction.