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Unless specifically prohibited in the language of the note, a promissory note is assignable by the lender. That is, the lender can sell or assign the note to a third party who the borrower must then repay.

Promissory notes are a valuable legal tool that any individual can use to legally bind another individual to an agreement for purchasing goods or borrowing money. A well-executed promissory note has the full effect of law behind it and is legally binding on both parties.

A home loan refers to a transaction where a borrower borrows money from the lender and, in turn, signs a promissory note that reflects the indebtedness as well as a mortgage that gives a security interest in the home in case the debt is not paid back, explains Reiss.

Sign the promissory note in front of the lender. There should be a section designated on the contract for signatures. You will need to print your name as it appears on the contract and provide a signature. The lender will need to sign the contract, as well.

What Is a Promissory Note? A promissory note is a financial instrument that contains a written promise by one party (the note's issuer or maker) to pay another party (the note's payee) a definite sum of money, either on demand or at a specified future date.

Generally speaking, there is no requirement for a witness or notary public to witness the signing of the Promissory Note.Even if it is not required, having an objective third party witness the signing of the note will be better evidence when you need to enforce the repayment of the note.

Give the borrower the original promissory note, with a notation on it that says CANCELLED or PAID IN FULL. Keep a copy of this note for your records.