0
No. The term mortgage is many times used by consumers and others to refer to both a note and a mortgage but they are not the same. A note is a promise to pay. An 'I owe you' committing the borrower to pay the lenders and setting out the terms of the loan. A mortgage is one form of a security agreement. The document sets out the terms of the security provided by the borrower to the lender to protect the note. A person has to own the property before they can provide a security agreement that will create a lien or charge on the property. Technically that means a home buyer will need to go on title before the mortgage can be used to put a lien on the property. A little chicken and egg but generally handled through escrow by a lawyer, solicitor or escrow agent. Many times there will be one physical document that contains the note and the mortgage. In some US states a borrowers will sign a note and a trust agreement. Trust deed states is a term for them. Rather than use a mortgage that requires court action a trust agreement will allow a third party to sell off the asset, the house, without court action. Cheaper and faster so the lenders are more open to making the loan in the first place. Less risk to the lender, lower costs to the borrower. No, they are not the same, but they work together. A promissory note says, "I am borrowing $X from you and promise to pay you back $Y per month which includes interest of Z% per year. On DATE, the loan will mature and I will pay you the outstanding balance at that time." But that is just a promise. What does the lender do if the borrower doesn't perform according to the terms of the note? That's where the mortgage comes in. The mortgage document (or Deed of Trust in some states) pledges ownership in a property as collateral for the promissory note. It says, "Here is the legal description of a property I own. If I don't pay this note on time and in full amounts due at each time, then you can foreclose the note and accept this property as payment."
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
Is a promissory note binding if there is no consideration in return?
In order to have a promissory note there must be consideration. If a bank gives you a mortgage, then the home is consideration for your payments.
Does a mortgage promissory note have to be notarized?
Most lenders do not require the promissory note to be notarized. The deed of trust, however, is usually required to be notarized.
Can 1 person sign the mortgage and another sign the promissory note?
the moon shins on the earth.
Who are some companies that are buyers of mortgage notes?
A mortgage note is essentially a promissory note with the property concerned as a security for the loan. Companies that buy mortgage notes include the Texas Note Company, NCR Note Buyer as well as The Mortage Buyer, Inc.
What are the terms of a chattel mortgage?
the buyer signs a promissory note, secured by the product, that constitutes a promise to repay the debt. The mortgage will typically contain an acceleration clause
Is a promissory note binding if there is no consideration in return?
In order to have a promissory note there must be consideration. If a bank gives you a mortgage, then the home is consideration for your payments.
Does a mortgage promissory note have to be notarized?
Most lenders do not require the promissory note to be notarized. The deed of trust, however, is usually required to be notarized.
What happens to a promissory note if the creditor takes title to real property?
Real property can only be encumbered by a mortgage and not by a promissory note. A promissory note has no effect on real property it is only evidence of a loan. If the mortgagee acquires title to the mortgaged property the title merges and the mortgage is extinguished.
Can 1 person sign the mortgage and another sign the promissory note?
the moon shins on the earth.
What is a cognovit note?
It is a combination of promissory note and chattel mortgage according to which the borrower waives his right of action to the chattel mortgage in the event of failure to pay the sum agreed in the transaction.
Who are some companies that are buyers of mortgage notes?
A mortgage note is essentially a promissory note with the property concerned as a security for the loan. Companies that buy mortgage notes include the Texas Note Company, NCR Note Buyer as well as The Mortage Buyer, Inc.
What are the terms of a chattel mortgage?
the buyer signs a promissory note, secured by the product, that constitutes a promise to repay the debt. The mortgage will typically contain an acceleration clause
Wording for promissory note?
wording for promissory note with collateral
Is a promissory note the same as a written contract?
A promissory note is a kind of written contract. The statutues and conditions under which it can be enforced are determined by the laws of the state in which it is drafted.
What is a mortgage buyer?
A "mortgage buyer" when referring to a private real estate note, would be a real estate investor who will purchase private mortgage notes for cash. These investors are also sometimes referred to as note buyers, promissory note buyers, land contract buyers and deed of trust buyers.
Is a promissory note valid with no consideration?
No....a promissory note is not valid without a consideration.
Can a lost promissory note or mortgage be enforced?
Many courts are now making the banks provide the actual note, no copies, and no "lost note" affidavits. Consult an attorney and make the bank produce the actual note.
