In real estate finance, a promissory note is a written agreement in which a borrower promises to repay a loan according to specified terms. It is executed after a loan commitment has been made and sets forth the amount borrowed, interest rate, repayment schedule, and maturity.
The promissory note establishes the borrower’s personal liability for repayment and serves as the legal evidence of the debt. While the note creates the obligation to pay, it is typically secured by a mortgage or deed of trust on real property.
