Ontario Mortgage Agent Practice Exam

The primary purpose of a deed in mortgage transactions is to convey ownership of the property to the buyer and establish the lender's rights. The deed serves as a legal document that transfers title from the seller to the buyer, ensuring that the buyer has the legal ownership of the property. Additionally, in the context of mortgages, it often includes information that indicates the lender’s security interest in the property.

When a borrower takes out a mortgage, the lender's interest in the property is secured through the deed, which may be accompanied by a mortgage agreement. This is important for the lender because it provides them with the right to take possession of the property if the borrower defaults on the loan. Thus, both ownership and lender rights are critical components of the transaction consolidated within the deed.

Other aspects, such as establishing a mortgage interest rate, outlining a payment plan, or providing warranties for the property, are relevant to mortgage agreements but do not pertain to the deed's primary function. The deed specifically addresses the transfer of ownership and the legal rights connected with that ownership, making it a fundamental aspect of real estate transactions involving mortgages.