Finance
An Illinois seller who carries back a note (seller financing) is acting as:
AA licensed mortgage lender subject to all Illinois banking regulations
BThe lender, providing financing directly to the buyer rather than requiring a third-party loan✓ Correct
CA guarantor for the buyer's bank loan
DA subordinate lienholder behind the buyer's primary mortgage
Explanation
When a seller carries back financing (seller carry-back), the seller acts as the lender by accepting a promissory note and mortgage from the buyer instead of receiving cash at closing. This allows sales when buyers cannot obtain full bank financing.
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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.
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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Math Concepts
State-Specific Concepts
Disclosure Requirements
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