Finance
In Delaware, what is 'seller financing' (purchase money mortgage)?
AA mortgage obtained by the seller to purchase their next home
BA financing arrangement where the seller acts as the lender, accepting a promissory note from the buyer secured by a mortgage on the property✓ Correct
CA state-sponsored financing program for low-income buyers
DA financing arrangement limited to commercial properties in Delaware
Explanation
Seller financing (purchase money mortgage) occurs when the seller extends credit to the buyer, essentially acting as the bank. The buyer gives the seller a promissory note and mortgage.
People Also Study
Related Delaware Questions
- What is the legal remedy of 'specific performance' in a Delaware real estate transaction?Contracts
- A Delaware purchase contract contains a 'mortgage contingency.' If the buyer fails to obtain financing despite good-faith efforts, the buyer may:Contracts
- What is a 'purchase money mortgage' (PMM) and how does it differ from a traditional bank loan?Contracts
- A Delaware home purchase contract includes a mortgage contingency requiring the buyer to obtain financing at 7% or lower. If rates rise to 7.5% and the buyer cannot qualify, what happens?Contracts
- What is a 'jumbo loan' in Delaware mortgage financing?Finance
- In Delaware, a 'contingency for sale of buyer's property' in a purchase contract means:Contracts
- A Delaware seller nets $195,000 after paying off a $145,000 mortgage, a 5.5% commission on a sale price of $360,000, and $4,000 in other closing costs. Did the seller achieve this net?Real Estate Math
- What is a 'note rate' versus the 'annual percentage rate' (APR) on a Delaware mortgage?Finance
Key Terms to Know
Promissory Note
A written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →