What Is Promissory Note?
Promissory Note: Your signed promise to repay the mortgage, with the rate, payment and terms.
Also called: mortgage note, note
The promissory note, or mortgage note, is your written promise to repay the loan. It states:
- The loan amount
- The interest rate, and for ARMs how it adjusts
- The monthly payment and due date
- The term and maturity date
- Late charges
- Any prepayment penalty
- What happens if you default
Note vs. security instrument
The note is the promise to pay. The deed of trust or mortgage is what gives the lender the right to foreclose if you don't. You sign both at closing.
Good to know
If your loan is sold, the note is transferred to the new owner. Your terms don't change.