Is there any difference between a mortgage and promissory note?

People use the terms “promissory note” and “mortgage note” to loosely refer to the same thing. But a mortgage and a promissory note are two very different things. How so?


Selling Your Mortgage Note or Promissory NoteA promissory note is an IOU (“I owe you”) on a loan. It is a promise to repay the loan amount to the owner.

Unlike mortgages or deeds of trust, promissory notes are not recorded in county land records. The lender holds the promissory note while the loan is outstanding. When the loan is fully paid off, the note will be marked “paid in full” and returned to the borrower.


A mortgage refers to a loan on a property. Technically, the mortgage is not actually a “loan.” It’s a legal document you give to a lender, which creates a lien on the property.

A mortgage or deed of trust is recorded in county land records to finalize the transaction, usually shortly after the borrower signs it.

When the loan is fully paid off, the lender records in the county land records either:

  • A release (or satisfaction) of the mortgage, or
  • A deed of reconveyance (which is used with deeds of trust).

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