A buyer agrees to purchase a property for $260,000. The buyer will make a down payment of $30,000 and obtain a new first loan for $150,000. If the seller finances the balance, what is the amount of the seller carryback note?
Correct Answer
A) $80,000
Subtract the cash down payment and the institutional first loan from the purchase price: $260,000 − $30,000 − $150,000 = $80,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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