Ace the Hawaii Pre-Licensing Exam 2025 – Surf Your Way to Real Estate Success!

The primary purpose of a mortgage note is to document the agreement between the lender and borrower regarding loan terms. This document is critical as it contains the specifics of the loan, including the amount borrowed, the interest rate, the repayment schedule, and any penalties for late payments. The mortgage note serves as a legal instrument that binds the borrower to repay the loan under the specified conditions, making it a fundamental component of the mortgage process.

While establishing the sale price of a property can be an important aspect of the overall transaction, it is typically detailed in a different document, such as a purchase agreement. Outlining property tax obligations is not part of the mortgage note's purpose, as tax responsibilities are usually defined by local tax authorities and conveyed through tax documentation. Similarly, applying for a home warranty involves a separate process and documentation that is unrelated to the mortgage agreement. Thus, the correct answer effectively encompasses the essential role of the mortgage note in the lending process.