National Real Estate Practice Exam

Which term defines the buyer in a transaction involving a mortgage?

1. Optionor

2. Grantee

3. Mortgagor

4. Lessee

The correct answer is: Mortgagor

In a transaction involving a mortgage, the term that defines the buyer is "mortgagor." The mortgagor is the individual or entity that borrows money from a lender to purchase real estate and gives the lender a mortgage as security for the loan. This means that the mortgagor is responsible for making regular payments to the lender until the loan is fully paid off. In this context, understanding the role of the mortgagor is crucial because it highlights the relationship between the borrower and the lender. The mortgagor retains ownership of the property while encumbering it with a mortgage, which serves as a legal claim for the lender in case of default. The other terms mentioned do not accurately describe the buyer in a mortgage transaction. An optionor is typically a party in an option agreement granting the right to purchase a property, the grantee refers to a person who receives property, and a lessee is one who rents or leases property from a lessor. Each of these roles is distinct from that of a mortgagor, emphasizing why "mortgagor" is the correct term for the buyer in this specific real estate context.