Someone owns a house free and clear — no mortgage.
They sell their house for $200,000, receive a $40,000 down payment from the buyer and take back the $160,000 balance as a note, an IOU, from the buyer, where he promises to pay the $160,000 plus interest in installments.
The note is secured by the house, so if the buyer defaults the seller can foreclose and get it back. In other words, the seller is the bank.
Get More Great Info just like this at The Paper Source University