Finance
A seller in Ohio agrees to carry back a second mortgage to help the buyer purchase the home. This is known as:
AAssumable financing
BSeller financing (purchase money mortgage)✓ Correct
CBridge loan
DFHA secondary financing
Explanation
When the seller finances part of the purchase price by taking back a mortgage from the buyer, it is called seller financing or a purchase money mortgage.
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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.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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