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. Owner Financing

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

    The expenses, over and above the price of the property that buyers ...
  4. Down Payment

    A type of payment made in cash during the onset of the purchase ...
  5. Assumable Mortgage

    A type of financing arrangement in which the outstanding mortgage ...
  6. Gentrification

    Gentrification refers to when a neighborhood or city undergoes ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Credit & Loans

    Mortgage Points: What's The Point?

    Learn how to pay less for your home in the long run, or save in the short run.
  2. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  3. Home & Auto

    The Ins And Outs Of Seller-Financed Real Estate Deals

    There's more than one way to buy or sell a house. Seller financing presents yet another unique option.
  4. Home & Auto

    4 Alternatives To A Traditional Mortgage

    If you can't qualify for or don't want a traditional mortgage, one of these options might be right for you.
  5. Options & Futures

    Score A Cheap Mortgage

    Hidden costs can create what looks like a good deal. Find out how to find the best mortgage possible.
  6. Options & Futures

    Conquering The Terms Of Your Mortgage

    Buyers with big down payments should get the best mortgage terms. Unfortunately, the equation isn't that simple.
  7. Credit & Loans

    Reverse Mortgages: How To Find A Good One

    Finding a reverse mortgage generally means using a lender that specializes in them. Here's how to find a reputable one.
  8. Stock Analysis

    How Are Interest Rates Affecting Annaly Cap Mgmt?

    Annaly Capital Management reported a net loss of $658 million thanks to the mortgage REIT's strategy of hedging its exposure to higher interest rates.
  9. Savings

    Mortgage Faceoff: Bank of America Vs. Wells Fargo

    Which bank offers the better mortgage deal? Here's how they compare on two popular types of mortgage.
  10. Options & Futures

    Give Yourself More Options With Real Estate Options

    Real estate options have many benefits, including a smaller initial capital requirement.

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center