What is a mortgage? | EquiTrust Title Company | Brian J. Ditthardt | http://www.equitrust-title.com/ | (850) 845-0233 | 42 Business Center Drive, #106, Miramar Beach, Florida 32550
A lot of people get a promissory note and a mortgage confused. A mortgage is an agreement between a bank extending a loan to the buyer in exchange for interest and they establish the home as collateral. Basically, it's a property owner's consent to put a mortgage lien on the property. Now the promissory note is a debt or the IOU or the obligation, basically says I borrowed X amount of dollars, I agree to pay the bank back at a certain percentage rate for a certain period of time. A mortgage however, is the lien or the consent which basically says thank you very much for promising to pay but just in case you can't, we have a mortgage lien on your property. And basically, we all know about mortgage foreclosures.