Quick answer
A promissory note is the written promise you sign at closing to repay your mortgage loan. It states the amount you owe, the interest rate, the payment amount and schedule, and what happens if you pay late or don’t pay.
Note vs mortgage or deed of trust
A home loan comes with two core documents that do different jobs:
| Document | What it does |
|---|---|
| Promissory note | Creates the debt: your personal promise to repay on the stated terms |
| Mortgage or deed of trust | Makes the home collateral and gives the lender a lien it can foreclose if you don’t pay |
When you pay the loan off, the note is marked paid and the lender releases the lien in the public records. Notes are often sold to investors such as Fannie Mae and Freddie Mac, and the company you pay — your mortgage servicer — may be different from the note’s owner. Your terms stay the same either way.
What to check before you sign
Compare the note with your Closing Disclosure: the loan amount, interest rate, monthly principal and interest, first payment date and maturity date should match. Look for the late charge and grace period, and whether there’s a prepayment penalty or balloon payment. On an adjustable-rate loan, the note also sets the index, margin and caps. Keep your copy with your other closing papers; the Loan Estimate guide shows how the two disclosure forms line up.
Sources
- CFPB: What documents should I receive before closing on a mortgage loan?
- CFPB: What can I expect in the mortgage closing process?
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.