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What is Promissory Note?
A promissory note is simply a "promise to pay." It contains a maker (the payor) and a lender (the payee). An unsecured promissory note is not attached to anything, the loan is made based on the maker's ability to repay. A secured promissory note may also be made based on the maker's ability to repay, but it is secured by a thing of value such as a car or a house.
If your home is used for security and you default on the promissory note, you could lose your home. Most promissory notes attached to property are secured by either a trust deed, also known as a deed of trust, a mortgage or a land contract, and those instruments are recorded in the public records. Promissory notes are often unrecorded.
A promissory note is simply a "promise to pay." It contains a maker (the payor) and a lender (the payee). An unsecured promissory note is not attached to anything, the loan is made based on the maker's ability to repay. A secured promissory note may also be made based on the maker's ability to repay, but it is secured by a thing of value such as a car or a house.
If your home is used for security and you default on the promissory note, you could lose your home. Most promissory notes attached to property are secured by either a trust deed, also known as a deed of trust, a mortgage or a land contract, and those instruments are recorded in the public records. Promissory notes are often unrecorded.