finance
promissory note
A promissory note is the borrower's written, signed promise to repay a debt, stating the amount, interest rate, payment schedule, and maturity date. In real estate financing, the note is the evidence of the debt, while the mortgage or deed of trust is the security instrument that pledges the property. A note is usually a negotiable instrument, so the lender can sell it to another party.
- Exam tip
- The note is the promise to pay; the mortgage is the security. If asked which document creates personal liability for the debt, choose the note.
- Example
- At closing, a buyer signs a promissory note to repay $300,000 at 6% over 30 years and a mortgage securing it with the house.
Related terms & state variants
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Last verified: 2026-10-23