Loan instruments
Promissory note
The borrower’s written promise to repay a debt on stated terms
It carries the amount, the rate, the payment schedule and the maturity date, and it is the evidence of the debt itself. It can exist without any security at all; the mortgage or deed of trust is what attaches it to a property.
How the exam asks about it
A negotiable instrument, so it can be sold on — which is the mechanism underneath the entire secondary mortgage market.
Related terms
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