What is the difference between the Note and the Mortgage?

Happy Friday!

If When a borrower takes out a loan with a bank to purchase a house, the Note is the document they sign agreeing to pay the loan back to the bank. It outlines how much is owed, how much needs to be paid back each month, the interest rate, etc.

But what if the borrower stops making payments? What can the bank do?

The Mortgage is the agreement between the bank and the borrower authorizing the bank to foreclose if the borrower doesn’t make their payments as they agreed to in the Note. The Mortgage document simply secures the loan by allowing the house to be used as collateral and outlines the procedure for the bank to take the house back.

I’ll be available all weekend if you have a client who needs to be prequalified before Monday!

Have a great weekend!