Real Estate Promissory Note Law and Legal Definition

A real estate promissory note is a document signed by a buyer who get a mortgage loan from a mortgage lender. It provides that the loan taken by the borrower must be paid back. But in case where the borrower defaults, the lender will not be completely exempted and will have to pay the loan. A real estate promissory note is distinct from other promissory notes. In a real estate promissory note, the lender arranges a mortgage or lien to secure the loan. The principle behind a real estate promissory note is that, if the borrower defaults on the loan, it is the borrower's obligation to pay back the loan amount. Real estate promissory notes must bind to conditions elaborated by the National Conference of Commissioners on Uniform State Laws.