Mortgage-Backed Note

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DEFINITION of 'Mortgage-Backed Note'

A type of promissory note that is associated with a particular mortgage loan. Mortgage-backed notes represent the legal promise to repay a mortgage loan. These notes specify the terms of the loan, including the amount of interest and principal that must be repaid. They also obligate the borrower to make the payments.

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BREAKING DOWN 'Mortgage-Backed Note'

The terms of mortgage-backed notes determine the type of mortgage that they back. If a note has a fixed schedule of principal and interest payments, then the mortgage is a fixed-rate mortgage. If the note has a flexible interest rate, then the mortgage is an adjustable-rate mortgage.

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RELATED FAQS
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