What is Promissory Note?
A promissory note is the written promise to repay a loan, spelling out the amount borrowed, the interest rate, the payment schedule, and what happens in default. In a home purchase it is the borrower's personal IOU to the lender, separate from the deed of trust that pledges the property as security. Together the two documents form the core of the mortgage.
Example: At closing the buyer signs a promissory note agreeing to repay $480,000 at a set rate over 30 years, while the deed of trust lets the lender foreclose if the note is not paid.