The Note and Mortgage

June 11, 2026 By Elliot S. Schlissel

If the homeowner seeks to borrow money to buy a home or refinance a home, they will apply to a financial institution to obtain these funds. A note is an agreement between the homeowner and lender creating a personal obligation to repay the financial institution back the money that is borrowed. The note will include various terms, interest rates, payment schedules and the information involving late charges and other issues.

The Mortgage

The mortgage is a separate and distinct contract from the note. The mortgage gives the financial institution a security interest in the homeowner’s home. The homeowner is pledging their home as collateral for the loan. The mortgage will often contain terms stating what the lender can do if the terms of the note and mortgage are not met by the homeowner. Those terms include initiating a foreclosure lawsuit seeking to sell the homeowner’s home at an auction sale at the end of the case.

Closing

There is often a sit down closing when a homeowner buys a home and takes out a mortgage. At the closing the homeowner will appear with their lawyer, sellers will appear with their attorney and the financial institution will have their attorneys handling the execution of the loan, the note and mortgage documents. At the end of the closing the buyer pays the seller and takes title to the home. There will be a title closer representing the title company at the closing. The title closer will pick up the transfer documents and make sure the transaction is filed and recorded with the proper authorities.

The law firm of Schlissel DeCorpo LLP has been helping families deal with mortgage and foreclosure problems for more than 30 years. We can be reached at 718-350-2802, 516-561-6645 or 631-319-8262 or by e-mail at info@sdnylaw.com.