A promissory note system is used by real estate companies
There are many people who cannot meet the requirements of a mortgage loan, so a promissory note system has been resorted to by real estate companies to offer people options to purchase a home. It is a simple deal where the seller holds on to the mortgage while the buyer signs a promissory note detailing the prices of the house, interest payments and installment payments until the housing unit is fully paid.
The seller is benefited in two ways: if the house appreciates in value or the mortgage gets paid off.