The borrower's IOU is referred to as the?

The borrower's IOU is referred to as the Note. A Note, or promissory note, is a legal document that represents the borrower’s promise to repay a specified amount of money, under particular terms, to the lender. It outlines the borrower's obligation and the conditions under which the repayment must occur, thus serving as the borrower's official acknowledgment of the debt.

This is crucial in the lending process, as the Note provides the lender with a framework for enforcing the repayment of the loan, in case the borrower defaults. While the mortgage serves as security for the Note, allowing the lender to take the property in case of default, it is the Note that fundamentally represents the borrower's promise or IOU.

Understanding the distinction between these terms is essential in real estate and mortgage transactions, as they each play distinct roles in the borrowing process and the legal aspects of lending.