Finance
What is 'seller financing' or 'owner financing' in Delaware?
AThe seller's bank provides the buyer's mortgage
BThe seller acts as the lender, providing a mortgage or installment note directly to the buyer as part of the purchase transaction✓ Correct
CFinancing by the seller's real estate agent
DThe seller's financial contribution to the buyer's down payment
Explanation
In seller (owner) financing, the seller acts as the lender and carries back a note and mortgage from the buyer. This avoids the need for a bank loan and can facilitate transactions when traditional financing is unavailable or costly.
People Also Study
Related Delaware Questions
- What is a 'jumbo loan' in Delaware mortgage financing?Finance
- What is a 'purchase money mortgage' (PMM) and how does it differ from a traditional bank loan?Contracts
- A Delaware property is appraised at $310,000. The lender will loan 80% of appraised value. What is the maximum loan amount?Finance
- A Delaware purchase contract contains a 'mortgage contingency.' If the buyer fails to obtain financing despite good-faith efforts, the buyer may:Contracts
- A Delaware appraisal determines the value of a residential property at $350,000. The bank's loan officer believes the value should be $390,000. Who has the authority to change the appraised value?Property Valuation
- A Delaware investor purchases a rental property for $300,000 using a 75% LTV mortgage. What is the loan amount?Real Estate Math
- A seller in Delaware offers to 'carry back' a second mortgage to help the buyer close. This is known as:Finance
- A Delaware home sells for $375,000. The buyer puts 20% down and takes a 30-year mortgage. What is the loan amount?Real Estate Math
Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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.
Math Concepts
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 →