A mortgage note is a sort of promissory note connected with a particular mortgage Loan. In simple words, it is a written promise to repay a specified amount of money with interest at a specified rate. However the mortgage itself is the same thing just that the mortgage note is a written statement making the borrower agreed on the point that he will payback the borrowed amount.
Elements of a Mortgage note:
Some of the most important elements in a mortgage note which determines the type of mortgage are:
If the mortgage note states that there should be fixed monthly installments with fixed interest rate then it is a fixed rate mortgage note.
In the United States, two types of mortgage instruments are widely used.
1. The Mortgage, and
2. The Trust Deed
A Mortgage is a form of security interest that guarantees that the payment of the debt form the borrower will be paid on time on the mortgaged property. Failure or foreclosure of that mortgage entails a judicial proceeding, which allows the debtor to sell the property withhold to pay the debt.
The Trust Deed
A common instrument of mortgages is the Trust Deed or the Deed of Trust, a legal instrument which is signed by the borrower to a trustee agreeing to pay the debt at an agreed period of time. It forms a lien on the title and not a title transfer, regardless of its terms. The major difference between a mortgage and a trust deed is that unlike mortgage, a trust deed can be foreclosed by a non-judicial sale held by the trustee and no judicial proceeding is required. On the other hand, it can also be foreclosed by a judicial proceeding.