Seller Financing

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Assumable Mortgage

    A type of financing arrangement in which the outstanding mortgage ...
  3. Down Payment

    A type of payment made in cash during the onset of the purchase ...
  4. Owner Financing

    When a property buyer finances the purchase directly through ...
  5. Closing Costs

    The expenses, over and above the price of the property that buyers ...
  6. Commercial Real Estate Loan

    definition of a commercial real estate loan
Related Articles
  1. Mortgage Points: What's The Point?
    Credit & Loans

    Mortgage Points: What's The Point?

  2. Understanding Your Mortgage
    Personal Finance

    Understanding Your Mortgage

  3. The Ins And Outs Of Seller-Financed ...
    Home & Auto

    The Ins And Outs Of Seller-Financed ...

  4. 4 Alternatives To A Traditional Mortgage
    Home & Auto

    4 Alternatives To A Traditional Mortgage

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center