Definition: A promissory note is a written promise to repay a specified debt according to stated terms. A loan note commonly identifies the principal, interest rate, payment schedule, and maturity date.
Example
A buyer signs a note promising to repay a $240,000 loan in monthly installments over the agreed term.
Keep the distinction clear
A note creates evidence of the repayment obligation. The mortgage is the separate instrument that secures that obligation with real property. Not every promissory note is secured by a mortgage.
Related terms
Mortgage · Principal · Interest
Keep studying
Mortgages: Borrower, Lender, Ownership, and Key Clauses
References: CFPB guide to closing forms
Pronunciation (US): PROM-uh-sor-ee NOHT (capitals show stress)
Pronunciation reference: Merriam-Webster
Comments
0 comments
Article is closed for comments.