DEFINITION of 'Seller Financing'

A real estate agreement where financing provided by the seller is included in the purchase price. It is also known as a purchase-money mortgage. A purchase-money mortgage is a mortgage given to the seller as part of the buyer's consideration for the purchase of the property and is delivered at the same time that the real property is transferred as a simultaneous part of the transaction.

BREAKING DOWN 'Seller Financing'

Seller financing is usually implemented when the buyer does not have the necessary credit to purchase the home. It can be an incentive for the potential buyer to purchase the property, and can be done when a buyer cannot qualify for a traditional mortgage.

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RELATED FAQS
  1. What is an assumable mortgage?

    The purchase of a home is a very expensive undertaking and usually requires some form of financing to make the purchase possible. ... Read Answer >>
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    An assumable mortgage allows the purchaser of a property to assume the mortgage from the property's seller. The benefits ... Read Answer >>
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