What is the main outcome of a dead pledge?

Prepare for the Saskatchewan Mortgage Associate Exam with comprehensive questions and flashcards. Study effectively using multiple choice questions and hints to enhance understanding. Be exam-ready!

A dead pledge, or "mortgage," primarily serves as collateral for a loan, making option B the correct choice. In essence, when a borrower takes out a mortgage, they are essentially giving the lender a legal claim against the property. This claim acts as security for the loan, ensuring that if the borrower defaults, the lender has the right to take possession of the property through foreclosure to recover the outstanding debt.

The concept of collateral is crucial in mortgage agreements, as it reassures lenders that they have a tangible asset backing the loan. When the mortgage is in place, the borrower retains ownership and use of the property but must adhere to the terms of the loan. This arrangement encourages lending, as it mitigates the lender's risk.

Considering the other options, the first option refers to ownership of land, which is misleading when discussing a mortgage; the borrower maintains ownership, but the lender has a claim on the property. The third option on joint ownership is not a requirement or a result of securing a mortgage; different ownership structures can exist without affecting the status of the mortgage. The last option regarding preventing transactions on the property could imply restrictions due to the mortgage, but it does not accurately represent the primary outcome of a dead pledge, which fundamentally acts

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