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If you’re borrowing money to buy a piece of real estate (house, condo, vacant land, commercial property, etc.), the lender will typically require that you sign both a Promissory Note and a Deed of Trust.
What Is A Promissory Note For Real Estate
A Promissory Note for real estate, simply put, is the promise that you’ll pay back the loan. The Promissory note typically includes the amount of the real estate loan, the interest rate on the loan, the term of the loan (e.g. 10-year, 30-year), the payment schedule (payment amounts and the required number of payments), and the collateral for the Promissory Note (which is the real estate that you’re buying).
What Is A Deed Of Trust For Real Estate
A Deed Of Trust for real estate is the document that places a lien on the property, on the behalf of the lender. The lender uses the Deed of Trust as security that you’ll repay the loan, and this document gets recorded with the County in which the property’s located
What’s Included In A Deed Of Trust
A Deed of Trust will typically include:
- a legal description of the real estate property
- the loan amount
- the beginning and ending date (maturity date) of the loan
- a reference to the Promissory Note you signed for the property
- details about what the lender can do in case you default on the loan by not meeting the terms in the Promissory Note
Types Of Financing For Real Estate
Lenders for real estate can include:
- mortgage companies
- commercial lenders
- private lenders
- family or friends
Generally speaking, no matter what type of real estate loan you get, you’ll be required to sign a Promissory Note and Deed Of Trust.
At Timely Contract, we have local real estate attorneys who have experience throughout Idaho, including: Boise, Post Falls, Coeur d’Alene, Lewiston, Moscow, and Sandpoint.
We also have local real estate attorneys who have experience throughout Montana, including: Missoula, Billings, Bozeman, and Kalispell.
And we have local real estate attorneys who have experience throughout Washington, including: Spokane, Spokane Valley, Liberty Lake, Medical Lake, and Cheney.