Use of promissory notes for payment

In situations where contracts are existing (ie bank loans, mortgages, auto loans etc) (please correct if wrong) we understand a promissory note cannot  be used or presented to pay another promissory note. However in order to create a new contract to obtain either a new mortgage, credit line, or auto loan, when attempting to present the PN to a bank/creditor for "acceptance", is it presented at the time of negotiations and mutual agreement of acceptance?  In example, if we try to obtain a mortgage, do we go to the broker/banker CEO/CFO and notify we will pay via PN ?