What is a promissory note?
A promissory note is a signed written promise by a borrower to repay a loan at a specified rate and time, distinct from the mortgage or deed of trust that pledges property as security for the debt.
A promissory note is the borrower's signed obligation to repay money lent. Unlike a mortgage or deed of trust, which secures the loan by putting property at risk, the promissory note is the contract that contains the actual payment terms: the principal amount, interest rate, payment schedule, and consequences for default.
In South Carolina real estate transactions, the promissory note and the mortgage or deed of trust work together. The note is the borrower's personal promise to pay. The mortgage or deed of trust is the lien against the property that gives the lender recourse if the borrower does not pay. If a borrower stops making payments, a lender can pursue foreclosure under the deed of trust, but the promissory note itself is what establishes the debt obligation.
When foreclosure proceedings begin in South Carolina, the promissory note becomes central evidence. Lenders must prove they hold the note or have the right to enforce it. Borrowers may raise defenses related to how the note was created, transferred, or recorded. An attorney experienced in real estate law can review the note's terms, verify its authenticity, and identify potential claims or defenses depending on whether you are the borrower, lender, or investor in a foreclosure matter.