10 Questions
Which type of seller financing involves the buyer giving the seller a deed of trust?
Land contract
What is NOT a reason for a seller to use seller financing?
It provides a seller who needs to be cashed out with a large lump sum
What significant tax benefit can seller financing provide for a seller?
An installment sale
A seller second is used to supplement which type of loan?
Either B or C
When might a seller be affected by the IRS's imputed interest rule?
Seller second uses an interest rate that is too far below market rates
In a land contract, what is the seller also known as?
Vendor
What is one factor a buyer should consider when contemplating a seller second financing option?
The seller's cash flow and yield
What aspect should a seller think about when considering a seller second financing?
Possible negative tax consequences
How long may a second loan's balloon payment be required to be after closing to meet a conventional loan requirement?
Not less than five years
What could be a possible consequence of the imputed interest rule for a seller considering a seller second financing?
Negative tax consequences
This quiz explores the implications of secondary financing on primary lenders in case of foreclosure, and provides considerations for both buyers and sellers in such scenarios. Topics include downpayment, loan qualification, combined payments, and balloon payments.
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