Are Notes and Mortgages the Same Thing?
The short answer is NO. The terms are often used interchangeably and are sometimes collectively referred to as the “Loan”. The Note is the promise to repay a certain amount of money that you loaned from the bank. The Mortgage is the instrument that allows the bank to take home in the event that you default on the Note. By way of example, if you take out a loan for $250,000, you will sign a note in which you promise to repay the bank $250,000 plus interest and other charges. At the same time, you would also sign a Mortgage that allows the bank to sell the home to guarantee payment of the $250,000 loan.