The note is a document on which a borrower promises to repay
a loan. IN the case of a home loan, the note is
often referred to as a mortgage note.
The note contains the following information:
It
identifies the “ borrower” as the person signing the Note, as well as, the
person’s successors and assigns.
It identifies the “lender”
by name.
A Note always contains
a clause declaring the borrower’s promise to pay interest and repay the principal
sum of the note.
It sets out the principal
amount, rate of interest and term of the note.
It says when and where
payments are to be made.
It gives the amount of
each payment.
It indicates the Note
is secured by a mortgage, deed of trust, or similar security instrument that
is dated the same date as the Note and called the “Security Instrument.”
The Security Instrument protects the lender’s legal interest in the
property should the property be foreclosed.
It indicates payment
adjustments, if applicable.
A Note declares a borrower’s
right to prepay the debt.
A
Note sets out the penalty if the borrower fails to make his/her payments.
It sets out late charges, and default charges.
The
Note sets out waiver rights, obligations and proper notice requirements.
By signing the note, the borrower accept and agrees to the
terms and conditions contained in the note.
