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What is the Difference Between a Note and a Mortgage?
A Promissory Note is like an IOU -- it establishes a debt and the terms of payment. Failure to pay on the note can result in being sued for financial assets.
A mortgage creates a lein against a piece of real estate. Failure to meet the terms of the mortgage leads to foreclosure, which determines the amount of debt owed and leads to sale of the property in question.
A significant difference is that failure to pay on the note can lead to seizure of your assets, whereas foreclosure on a mortgage cannot.