How do notes work on free and clear properties?

[Ben Bakhshi]

Can you sell a note if you own a property free and clear? Sorry for the newb question, but there is a lot of terminology in this sub-forum that I don't understand.

[Account Closed]

You own a free and clear house that is worth $100,000. You want to buy an airplane that is worth $50000. You ask Mr. Airplane owner, "If I gave you a note for $50,000 at 6% interest with payments of $500 per month secured by a house that I have owned for years, would you give me the $50000 airplane? " He says yes. Now you own a free and clear airplane and you owe $50,000 on your house. Mr Airplane owner is the morgagee. You are the morgagor. If you want some cash, sell the airplane. Anywhere, in this answer, you see the word airplane, you can replace it with house ,lot, business,RV, diamond ring, racehorse . If that note and mortgage did not have a due on sale clause, you could sell the house and let someone assume that mortgage or better yet, wrap another mortgage around it.