The Note Is The Written Promise To Repay The Funds Borrowed

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

One of the most if not the most important documents a Borrower will sign at the Closing for their new home is the Note.  The reason why I feel the Note is the most important document a Borrower will sign at the Closing for their new home is because of the commitment a Borrower makes when they sign it.  No other document the Borrower will sign in the purchase of their new home will obligate them to the extent the Note does.  This is because The Note Is The Written Promise To Repay The Funds Borrowed.

The Note consists of several pages, and goes into great detail to make one simple statement, that upon signing the Note the Borrower agrees to repay the Holder of the Note the Debt with Interest. It is that simple, and the most important commitment the Borrower makes at the Closing Table.

The Note will state the amount of the debt and the interest rate. Once the Buyer signs this document they are personally responsible to repay the amount stated on The Note. The Note contains a lot of the same terms and conditions which are also stated in "The Mortgage". These two documents may be similar, but they have very significant differences and carry different obligations.

While The Note Is The Written Promise To Repay The Funds Borrowed, The Mortgage is the legal device used to secure the property, and pledges the title of the property as security for the Loan.  Both documents clearly stipulate what the obligations of the Borrower are, and what will happen if the Borrower defaults on the Loan.  

The Note is a written promise to repay, it does not get any clearer than that.  Borrowers sign the Note with the full understanding of what it means, and Lenders lend the money to purchase a house based upon that written promise.

So before a Borrower signs the Note, they need to be very sure it is a commitment they are willing to make, and not claim later they did not understand what they were signing, or worst claim they did not have an obligation to repay.  If the Borrower does not understand anything else in the huge stack of documents they will sign at the Closing, they need to understand this one thing The Note Is The Written Promise To Repay The Funds Borrowed.

A Borrower should not sign the Note if they are not committed to complying with the obligations contained within the Note.  Signing this document, and then not complying with it, carries consequences that are long lasting and far reaching. Borrowers need to understand what they sign, and not sign if they don't.  Claiming later they did not understand, does not relieve them of their obligation.  Borrowers have every opportunity to ask questions during and before the Closing.  It is their responsibility to do so if something has not been explained to their satisfaction.

 

**************************************************************************

 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

close

Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Tony and Suzanne Marriott, Associate Brokers 11/29/2017 03:41 AM
  2. Gabe Sanders 11/30/2017 11:50 PM
Topic:
Mortgage / Finance
Location:
Connecticut
Groups:
Mortgages
1st Time Buyers
Real Estate Rookie
Be The Best In Your Field
Tags:
the note

Spam prevention
Show All Comments
Rainmaker
3,330,171
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I like your explanation of the note.  Most have no idea at all

Nov 24, 2017 06:03 PM #3
Rainmaker
2,563,629
Sally K. & David L. Hanson
Keller Williams 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce - Short Sale

We believe that most people understand the concept....and have every good intention of honoring it....and sometimes life gets in the way...unemployment, death, divorce and we will understand why those good intentions get cast aside for medicine, food, gas....unfortunatly.

Nov 25, 2017 03:04 AM #4
Rainmaker
3,927,719
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good morning George.  Unfortunately, all too many people don't understand fiscal responsibility these days.

Nov 25, 2017 07:00 AM #5
Ambassador
1,397,520
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Hi George, yes it is the most important as it is the big ticket. A promise to pay the note is what it takes to retain ownership of the home. 

Hope you had a great Thanksgiving. D 

Nov 25, 2017 08:41 AM #6
Ambassador
3,065,328
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi George- this is the first explanation I've seen of this kind!  How lucky are your clients!!1

Nov 25, 2017 09:54 AM #7
Ambassador
1,839,206
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Hi George, the note is a very document that should be taken very seriously not only when signing it but also when fulfilling ones obligations under it. 

Nov 25, 2017 05:39 PM #8
Ambassador
3,065,328
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Nov 25, 2017 05:43 PM #9
Rainmaker
2,483,046
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

George, you are so spot on with this post, when my parents signed many years ago, they understood that if push comes to shove they would give up things to make sure they kept their home.....Endre

Nov 25, 2017 07:55 PM #10
Rainmaker
1,678,331
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

George, many people do not get it as we saw with all the short sales and foreclosures of years past and still happening.  Knowing and understanding all the verbiage and commitment to own a home is essential...clearly stated by you!

Nov 26, 2017 04:12 AM #11
Rainmaker
1,372,641
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

I am so glad that Kathy Streib featured your post in her weekly selection. Happy belated thanksgiving. 

Nov 26, 2017 04:16 AM #12
Rainmaker
3,200,499
Dorie Dillard
Coldwell Banker United Realtors® ~ 512.346.1799 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning George Souto,

An excellent post and one every buyer should read! I'm so glad that Kathy Streib featured this in her "Ah-ha" moments for the week! The note is a very important document and is not to be signed lightly!

Nov 26, 2017 06:08 AM #13
Rainmaker
2,543,536
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

I can see why Kathy chose your post for her weekly highlight...great job!

Nov 26, 2017 06:59 AM #14
Ambassador
3,365,304
Jeff Dowler
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Hi George

I suspect many borrowers don't really think much about the significance of this important document and what it really mean. This was a useful explanation for all buyers with a loan!

Jeff

Nov 26, 2017 10:39 AM #15
Rainmaker
1,890,931
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

It's surprising to me just how many people there are that don't take that responsibility seriously enough.

Great post George!

Nov 26, 2017 06:40 PM #16
Rainmaker
2,253,283
Rebecca Gaujot
Perry Wellington Realty, Adam Conrad, Broker - Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

George this is a great explanation of the Note and I wonder just how many really understand it when signing!

Nov 26, 2017 07:00 PM #17
Ambassador
1,849,034
Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

 What a profound explanation of "the promise to pay".   Very nice post, George.

Nov 27, 2017 08:01 PM #18
Rainmaker
287,298
John Wiley
Jones & Co. Realty - Fort Myers, FL
Lee County, FL Real Estate GRI, SRES,GREEN,PSA

George, thanks for the clear description of a Note and it's importance.

This should be a must read for all those who are purchasing a home by mortgage.

Nov 28, 2017 05:52 AM #19
Rainmaker
2,616,175
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

George Souto "So before a Borrower signs the Note, they need to be very sure it is a commitment they are willing to make, and not claim later they did not understand what they were signing, or worst claim they did not have an obligation to repay."

Right on target - and - re-blog!

Nov 29, 2017 03:41 AM #20
Rainmaker
3,943,774
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Good morning, George Souto good explanation about the note and mortgage.... I'm holding a second mortgage for someone, and the note in safely tucked away in my safe deposit box.... without the note, we're have problems!!

Nov 29, 2017 03:57 AM #21
Rainmaker
1,416,544
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

The note is the ultimate commitment a buyer can make to the world and themselves!

Dec 04, 2017 06:08 AM #22
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
3,300,686

George Souto

Your Connecticut Mortgage Expert
Call Me With All Mortgage Questions
*
*
*
*
Spam prevention