Vendor Take-Back Mortgage


DEFINITION of 'Vendor Take-Back Mortgage'

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.

  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Wrap-Around Loan

    A loan that is most commonly used with property with an outstanding ...
  3. Lien

    The legal right of a creditor to sell the collateral property ...
  4. Silent Second Mortgage

    A secondary mortgage placed on an asset that is not disclosed ...
  5. Financing

    The act of providing funds for business activities, making purchases ...
  6. Second Lien Debt

    Debts that are subordinate to the rights of other, more senior ...
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