What's a promissory note?

[Carlos Rodrigues]

I'm taking my real estate course to get my license. And we we're spoke about promissory note. My professor summed up what it meant, and I didn't get the chance to have him clarify what it means exactly. Maybe a example would of been great. Also I've heard of people purchasing promissory notes. How is this done? And what purpose does it serve? Does it compare to a mortgage? How does it differ? Thank you in advance for your help. As I am in to the real estate industry and I'm still learning terminology. Thank you again, it's greatly appreciated!!

[Jeff Copeland]

Actually, promissory notes can be secured or unsecured. 

In terms of real estate (at least in the U.S. and particularly in lien theory States), the Promissory Note outlines the payment terms to the lender, while the mortgage pledges the home as collateral. 

The two go hand in hand; but the promissory note is essentially the document where the borrower promises to pay X number of payments for X number of years at X percent interest. More details here.