A [b:7cf5f5d0ca]promissory note[/b:7cf5f5d0ca] or a mortgage note is a legal document that states that a borrower availing a mortgage loan is obligated to repay it within the specified time period. It is not a simple statement regarding the loan balance owed by a borrower; rather it is an affirmation that the borrower has the responsibility to pay off the mortgage dues.
For example[/b:7cf5f5d0ca], Jessica takes a mortgage loan worth $200,000 from Dennis for 5 years and makes a promise in writing that he will repay it within the allotted time. This written promise is known as 'promissory note'.
A promissory note consists of the terms and conditions of the mortgage deal in writing along with the principal amount, interest rate and the date of repayment of the mortgage. The note also states the mode of repayment of the home loan. There are also provisions stating how the lender should act in case the borrower fails to repay the loan fully. This often includes conditions under which a lender may demand a foreclosure of the property that is kept as security for the mortgage loan.
A promissory note is secured by a mortgage or deed of trust which gives the lender a claim against the home if the borrower fails to live up to the terms of the mortgage note. Generally, borrowers sign the promissory note and the deed of trust at the time of closing. In case there is a cosigner, the mortgage note also requires him to sign the note. The cosigner is equally responsible like the borrower to pay off the mortgage loan. In case the borrower fails to make monthly mortgage payments, it is the cosigner who has to fulfill the obligation.
We present here a sample of the Promissory Note used in the state of Florida.
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