What is a 'Vendor Take-Back Mortgage'

A vendor take-back mortgage is a type of mortgage in which the seller offers to lend funds to the buyer to help facilitate the purchase of the property. The take-back mortgage often represents a secondary lien on the property, as most buyers will have a primary source of funding other than the seller.

BREAKING DOWN 'Vendor Take-Back Mortgage'

In most cases, the take-back mortgage is offered at a rate below market value. This makes the option more attractive for the buyer, which can translate into a fast sale for the seller because another source of financing is being offered. Take-back mortgages often allow buyers to purchase property valued above their traditional financing limits.

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RELATED FAQS
  1. What are the benefits of an assumable mortgage?

    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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