PSI New Jersey Real Estate State Practice Exam 2025 - Free Real Estate License Practice Questions and Study Guide

The encumbrance created when a landowner uses their land as security for a loan is classified as a mortgage. When a property owner takes out a loan to purchase real estate, they typically sign a mortgage agreement, which gives the lender a legal claim to the property. This agreement serves as collateral, providing the lender assurance that if the borrower defaults on the loan, the lender can take possession of the property through foreclosure.

A mortgage specifically represents a voluntary lien, which is established by mutual agreement between the borrower and the lender. In contrast, an involuntary lien arises without the property owner's consent, often as a result of unpaid debts such as taxes or court judgments. The other options, like a deed of trust and easements, describe different types of agreements or rights pertaining to property but do not specifically denote the encumbrance associated with securing a loan.

Therefore, understanding that a mortgage is the direct encumbrance linked to a loan makes clear why that option correctly answers the question.