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Real estate glossaryNational exam concept

Promissory note

A promissory note is the borrower's written promise to repay a debt under stated principal, interest, payment, maturity, and default terms.

Exam area: Financing

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What does “promissory note” mean in real estate?

A promissory note is the borrower's written promise to repay a debt under stated principal, interest, payment, maturity, and default terms. It is evidence of the debt.

How is “promissory note” different from the closest wrong answer?

The note creates the repayment obligation. The mortgage, deed of trust, or Georgia security deed secures that obligation with real property.

What is the Georgia-specific rule?

Georgia commonly pairs the note with a security deed. The note can be transferred as the debt instrument, while the security instrument is recorded in the real estate records.

Worked exam example

Scenario

A borrower signs a promise to repay $320,000 over 30 years and separately signs a security deed covering the home.

What is the most common exam trap?

Trap correction

Recording usually concerns the security instrument, not the borrower's private note itself.

Original exam check

Apply the definition

At a Georgia closing, a buyer signs one document promising to repay $300,000 at a stated rate and another giving the lender a security interest in the house. Which document is the evidence of the debt itself?

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Continue with Financing complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.