Seller financing
An arrangement where the seller lends the buyer some or all of the purchase price, and the buyer pays the seller over time. Terms are negotiated, often with a balloon payment, and the seller usually holds a lien until paid.
Also called: owner financing, seller carryback, owner carry, purchase money mortgage
Related terms
The signed promise to repay a loan, stating the amount, rate, payment schedule and what happens on default. The mortgage or deed of trust is the separate document that ties the debt to the property.
A loan with smaller payments for a set term followed by one large final payment of the remaining balance. Borrowers usually plan to sell or refinance before it comes due.
A legal claim against a property that secures a debt, such as a mortgage, unpaid taxes or contractor bills. Liens generally must be paid off or released before the property can be sold with clear title.
A mortgage a buyer can take over from the seller, keeping its rate and remaining term. FHA, VA and USDA loans are generally assumable with lender approval; most conventional loans are not. The buyer pays the seller's equity in cash or other financing.
The part of the purchase price you pay in cash rather than borrow. A larger down payment lowers the loan amount and can remove the need for mortgage insurance on a conventional loan.