====== Promissory Note ======

A **promissory note** is a **written promise** by a borrower to **repay a loan** according to specified terms.

===== Key Characteristics =====
  * Evidence of the **debt**
  * Contains the **borrower’s promise to pay**
  * Specifies loan terms (amount, interest, repayment schedule)
  * Is **negotiable** in many cases
  * Separate from the security instrument

===== Parties to a Promissory Note =====
  * **Maker** – borrower (promises to pay)
  * **Payee** – lender (receives payment)

===== Promissory Note vs Security Instrument =====
  * **Promissory Note**
    * Creates the **personal obligation** to repay
    * Unsecured by itself

  * **Mortgage / Deed of Trust**
    * Secures the note with real property
    * Creates a **lien**

===== Default =====
  * Failure to pay as agreed
  * Allows lender to enforce remedies under the security instrument

===== Exam Tip =====
  * The note is the **debt**
  * The mortgage or deed of trust is the **security**