A South Dakota seller agrees to carry back a second mortgage for the buyer. This is also known as:
Correct Answer
B) Seller financing or a purchase money second mortgage
When a seller carries back a second mortgage, they are providing seller financing for a portion of the purchase price. This is common when the buyer's first mortgage does not cover the full amount needed, helping bridge the gap between the loan and purchase price.
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Related Topics & Key Terms
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Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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