What document serves as a formal agreement to the mortgage terms after closing?

The mortgage deed or note serves as a formal agreement to the mortgage terms after closing because it outlines the specific terms and conditions agreed upon by both the borrower and the lender. This document includes critical information such as the loan amount, interest rate, repayment terms, and the obligations of the borrower to repay the loan. Once signed, it becomes a legally binding contract that provides the lender with the right to foreclose on the property if the borrower defaults on the loan.

The other choices do not provide this formal agreement. The loan application details the borrower's financial situation and is used by the lender to assess eligibility for a loan. The settlement statement itemsize the closing transaction but does not constitute an agreement to the mortgage's terms. The pre-approval letter indicates that a borrower is likely eligible for a loan up to a certain amount but is not a binding agreement on specific loan terms. Thus, the mortgage deed or note is the correct answer as it definitively establishes the contractual obligations between the involved parties post-closing.