Young man purchasing move-in-ready model home in new subdivision. Developer offers to sell model furniture with real estate. Both serve as collateral. This is:
Correct Answer
D) Package loan
A package loan is a mortgage that covers both real property and personal property under a single note and security instrument. Here the developer sells the model home together with its furniture, and both the real estate and the furnishings stand as collateral for the one loan, which is exactly the package loan pattern. The personal property is typically covered by a security agreement recorded alongside the deed of trust so the lender's lien reaches the furniture as well as the dwelling.
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More Financing Questions
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