Promissory note
National Real Estate Exam glossary · Financing
Definition
The borrower's written, signed promise to repay a debt according to stated terms—amount, interest rate, schedule, and maturity. The note is the evidence of the debt itself; the mortgage or deed of trust is merely the security that backs it.
Promissory note in plain English
A promissory note is simply the borrower's signed "IOU" — a written promise saying "I will pay this money back, at this interest rate, on this schedule, by this date." It's the actual proof that the debt exists and that you owe it. People often confuse it with the mortgage, but the note is the promise to pay, while the mortgage (or deed of trust) is just the backup that lets the lender take the house if you don't keep that promise. The note is the debt; the mortgage is the security guarding it.
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