Finance
In Colorado, 'owner financing' (seller carry-back) means:
AA. The buyer finances the purchase through a bank with the seller's guarantee
BB. The seller acts as the lender, accepting installment payments from the buyer instead of a lump-sum cash payment✓ Correct
CC. The owner pays for all the buyer's closing costs
DD. The seller gets a loan to pay off the buyer's mortgage
Explanation
In owner (seller) financing, the seller extends credit to the buyer, accepting a promissory note and deed of trust instead of full cash proceeds at closing. The buyer makes monthly payments to the seller.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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