What is the exam-ready answer?
| Roadmap lesson | 70 of 500 |
|---|---|
| Official syllabus topic | Financing Instruments and Promissory Notes |
| Official PSI area | Financing |
| Published area weight | 10% of the 100-question national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
| Last verified | August 2, 2026 |
The Rule
PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.
Complete lesson
Read each concept as part of one decision system. The exam often gives one accurate statement and three statements that belong to a nearby concept.
Promissory note
The note identifies principal, interest, payment obligations, maturity, and borrower promises. It is negotiable or transferable subject to applicable law and its terms.
Security instruments
A mortgage creates a security interest under the jurisdiction's theory. A deed of trust commonly involves a trustor, beneficiary, and trustee. Georgia commonly uses a deed to secure debt or security deed.
Lien and title theories
National questions may distinguish lien-theory, title-theory, and intermediate-theory states. The parties' rights and foreclosure process depend on jurisdiction and instrument.
Satisfaction and assignment
When debt is paid, the security interest should be canceled or released in the public record. Assignment transfers lender rights; assumption or subject-to language concerns the buyer's relationship to debt.
Decision rule
Georgia-specific distinction
Worked example
Scenario. A borrower signs one document promising monthly repayment and another conveying a security interest in the home.
Reason it through. The repayment promise creates evidence of debt; the second document connects the real property to that obligation.
Answer. The first is the note and the second is the security instrument, commonly a security deed in Georgia.
Common exam traps
- Calling the note the lien instrument
- Assuming the lender occupies the property
- Treating assignment as debt satisfaction
- Using mortgage terminology without noticing Georgia's security deed
Original practice questions with detailed explanations
These questions were written for instruction and mapped to the current outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1Which document is evidence of the borrower's debt?
- A. Promissory note
- B. Deed
- C. Appraisal
- D. Title policy
Show answer and explanation →
Answer: A. Promissory note
The note contains the borrower's promise and repayment terms.
Question 2What is hypothecation?
- A. Pledging property while retaining possession
- B. Transferring possession to the lender
- C. Paying off a lien
- D. Recording a plat
Show answer and explanation →
Answer: A. Pledging property while retaining possession
The borrower pledges real property as security but ordinarily keeps possession.
Question 3Which instrument commonly secures a Georgia real estate loan?
- A. Bill of sale
- B. Security deed
- C. Certificate of occupancy
- D. Quitclaim release only
Show answer and explanation →
Answer: B. Security deed
Georgia commonly uses a deed to secure debt, also called a security deed.
Mastery tracking
Mark this lesson mastered only when every statement is true.
- State the direct answer and decision rule without notes.
- Explain every core concept in plain English.
- Solve the worked example after changing one important fact.
- Identify the Georgia distinction before reading answer choices.
- Answer all three questions correctly and reject every distractor.
- Repeat the topic in mixed practice on a later day.
Recommended next lesson
Continue with Basic Real Estate Financing Concepts. Continue to roadmap lesson 71 and build on this decision rule.
Return to the Financing hub to see every official branch and the complete lesson sequence for this content area.