A mortgage loan is a type of secured promissory note in which the mortgage has been always real property and a promissory note is based on a promise that the borrower will pay back the loan amount plus the specified interest rate within or on a specified period of time. A person who is buying property or the one who already own a property is eligible for getting mortgage loans and mortgage notes and in such loans, the amount of the loan is equal to or less than the value of the mortgage. Like other promissory notes, a mortgage note is also based on information like the names of the two parties that is the borrower and lender, the total amount of the loan, applied interest rate, date of return or due date, method of repayment and terms of the note.
A mortgage note has a number of things that both being a borrower and lender needs to be considered. A mortgage note is actually a borrower’s promise for the repayment of loan, however, the borrower should look at the defaulter terms carefully because in case of defaulter the borrower will lose the ownership of his/her property or mortgage. A mortgage is good for a lender because the lender has an option to sell out the property and to repay the loan amount.
A Sample Mortgage Note
$ _________________ Date: ______________
State and City including ZIP Code
For the amount received, the undersigned ______________ (Borrower’s name) residence of _________________ promises to pay to the order ________________ (Lender’s name) residence of _________________________ the principal sum of $______________ together with the interest rate of the _____________% per annum until the entire loan amount is paid in ____________ equal installments starting from the ___________ (date) of the __________ (month) to the __________ (date) of ___________ (month).
This note together with the interest rate is secured by a mortgage on real estate, of even date herewith, made by the borrower hereof in favor of the lender.
Terms of the Mortgage note
Signature of the borrower Signature of the lender
Guidelines of writing a Mortgage Note
- On the top of the sheet, write “Mortgage Note” in bold letters.
- At the left top of the note write the principal amount in dollars and at right top write date.
- Write a note with the borrowers promise of repayment of the loan specifying the names of the borrower and lender, the total amount of the loan also known as principal amount, rate of interest, method of repayment that is installments or lump and the due date.
- Terms of the loan, in which the borrower and lender has to include some effective terms regarding the repayment schedule such as a specific date and place as well as the terms of the violation and the terms of the defaulter.
- Clearly state that the note is secured by a real estate mortgage as well as specify the current value of the mortgage.
- End the note by taking signatures of the contracting parties as well as of the witnesses. Ensure that your mortgage note is according to the laws of the state.
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