Finance
What is 'seller financing' (owner financing) and when might it be used in Illinois transactions?
AWhen the seller helps the buyer find a traditional mortgage lender
BWhen the seller acts as the lender, receiving monthly payments from the buyer instead of a lump sum at closing✓ Correct
CA government program where the State of Illinois provides financing for buyers
DWhen the seller pays the buyer's closing costs and lender fees
Explanation
Seller financing (owner financing) occurs when the seller provides financing to the buyer instead of the buyer obtaining a third-party mortgage. The buyer makes regular payments directly to the seller.
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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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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.
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
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