Finance
A seller who 'carries back' financing means the seller:
ACancels the sale and keeps the property
BActs as the lender, allowing the buyer to pay the purchase price over time directly to the seller✓ Correct
CApplies for a new mortgage on behalf of the buyer
DReturns part of the purchase price to the buyer at closing
Explanation
Seller carryback (seller financing) occurs when the seller acts as the lender, accepting payments directly from the buyer over time rather than receiving the full purchase price at closing from a third-party lender.
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Key Terms to Know
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.
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.
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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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