Which document should be prepared before exchange regarding mortgages?

• A. Deed of surrender
• B. Mortgage deed
• C. Transfer deed
• D. Assignment of rents

Answer: (B)

The essential point here is that before exchange, the security that backs a loan on a property must be legally created. The document that does this is the mortgage deed. It is the formal instrument in which the borrower agrees to grant a charge over the property to the lender, and it sets out the loan amount, repayment terms, interest, covenants, and what happens on default or redemption. Having this deed prepared and reviewed before exchange ensures both sides know the exact security and terms, so contracts can exchange with confidence and completion can proceed smoothly.

Deed of surrender would only come into play if there’s an existing mortgage being released, not the new loan’s security. A transfer deed is what passes ownership to the buyer and is normally dealt with at or after exchange/completion, not to secure the loan. An assignment of rents might be used as additional security in some cases, but it’s not the primary instrument that creates the mortgage itself.