Legal
Promissory Note
A legal document you sign at closing that is your personal promise to repay the mortgage loan according to the agreed-upon terms. The promissory note specifies the loan amount, interest rate, payment schedule, and consequences of default. While the deed of trust or mortgage secures the loan against the property, the promissory note establishes your personal obligation to repay the debt.
Why It Matters
Promissory Note has real legal implications for your rights and obligations as a homeowner or borrower. Overlooking the legal details of a real estate transaction can lead to costly problems down the road.
If you have questions about promissory note, consider consulting a real estate attorney, especially if you are in a state that requires attorney involvement in real estate closings. A small investment in legal advice can prevent major headaches later.