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Definition of Mortgage Note from Mortgage Glossary

Mortgage Note A written negotiable promise (agreement) to pay a sum of money plus interest at a set interest rate. The note is secured by a mortgage. In turn, mortgage is secured by property. Mortgage note states the amount of debt and the rate of interest, and makes the borrower who sign's the note personally responsible for repayment. Mortgage notes are also known as discounted mortgages, paper or cash flows. Investors buy them as a portfolio investment or for speculation. Both commercial and residential mortgage notes are in use. Generally speaking, while mortage is secured by property, mortgage note is secured by future mortgage payments (principal and interest). Many owner-financed or private investor-financed mortgages are sold as a mortgage notes. Owner financing notes always specify term, interest rate, payment amount, and payment date on which the buyer of the property must pay the seller. The conditions are formally written in a note, sometimes also called a promissory note or installment note. There always are investors, who will buy these notes. The note will be discounted to offset investor's risk. The amount of discount varies. Biggest factors in determining the discount are: the type of property, amount of equity in the property, and the credit of the buyer. The higher equity and the better the buyer credit, the less is the discount.				You'll be re-directed to Loan Savings Solution Web Site
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