You will be asked to sign a stack of paperwork, including the note, also known as a promissory note or mortgage note, when you buy a home and secure a 'mortgage' to fund the purchase.
The promissory/mortgage note includes information regarding the loan, such as the principal amount borrowed, the rate of interest, and the duration of the loan. A promissory note is the borrower's commitment to repay the loan.
Promissory notes are usually documented and enter the public record shortly after settlement. The trustee (or lender) holds the promissory note until the debt is repaid. Once the borrower has satisfied the note's terms, the trustee will record a deed of reconveyance or stamp the recorded promissory note as paid. The promissory note is a commitment made by the borrower to repay the money he or she has borrowed.
What is a mortgage agreement?
The mortgage agreement grants the lender the right to repossess the property if the borrower(s) fails to make timely payments or otherwise abide by the loan's terms. This document is also known as a mortgage, trust deed, or security instrument.
The mortgage specifies whether the property is being used as a primary home or an investment property. Another requirement of the mortgage agreement might be a ban on or near the property of the use of dangerous chemicals.
See an example of a mortgage.
What Exactly Is A Deed?
The deed conveys property ownership from the seller (sometimes referred to as the grantor) to the buyer(s), referred to as the grantee. The deed contains the legal description of the property (including property lines).
There are many kinds of deeds; the following are a few of the more popular forms:
General warranty deed
A general warranty deed is a legal instrument that conveys complete ownership of a piece of real estate.
Special warranty deed
The special warranty deed protects the seller's title to the property only while it is in his possession.
Quit claim deed
Any existing ownership interest is transferred by a quit claim deed. For example, heirs to an estate may have an ownership interest in the property. A quit claim deed is used to convey any ownership interest in a property.
Mortgage Notes: Frequently Asked Questions
Q. Are mortgage records accessible to the public?
A. The mortgage (or deed of trust), the promissory note, and the deed are all promptly registered and enter public record soon after settlement.
Q. Is it necessary to record promissory notes?
A. Borrowers must sign legally enforceable promissory notes that contain unconditional commitments to pay specified sums of money. Notarization is not required for promissory notes.
Q. Is it necessary to record a mortgage note?
A. Generally, mortgage notes are registered in the jurisdiction in which the property is situated.
Q. What are mortgage notes and how do they differ from other types of debt?
A. The note specifies the terms of the loan's repayment (i.e. interest rate, term, etc.). The mortgage (or trust deed) details the lender's and borrower's respective rights and interests in the transaction.
Q. What is included in a mortgage note?
A. The mortgage note describes the loan, including the loan amount, the interest rate, the term of repayment, the dates on which loan installments are to be made, and the mailing address for loan payments.
Q. How is a mortgage distinguished from a note?
A. Sometimes referred to as a mortgage note, a promissory note is referred to as a promissory note. The promissory note provides specific information about the (i.e. interest rate, term, amount borrowed, etc.). The mortgage specifies the loan's conditions of enforcement. For instance, if the mortgage terms are not fulfilled, you will discover the power to foreclose in the mortgage paperwork.
1. Promissory note - specifies the conditions of the loan
2. Mortgage - establishes the borrower's and lender's respective rights.
3. Deed - The deed serves as the legal description of the property and identifies the new owner.
Q. How can I locate my mortgage note?
A. You may locate it among the stack of settlement documents that you signed. If you've combed through the stack of documents page by page and are unable to locate it, the following are your options:
- Securing the original mortgage note requires contacting your current mortgage lender.
- Contact the county recorder's office in the county where the property is located.
- Contact the lender and cross your fingers that they will assist you.