Financing – loan from a third-party lender, “taking over” of payments by the buyer in
an existing loan which the seller or some former owner obtained from a third party
lender, financing from the seller himself in the form of a deferral of receipt of some
portion of the purchase price.
• Purchase of realty is often secured by the same realty through a deed of trust.
• Balloon v. Amortized Loans
• Wrap-around financing: seller continues making payments on the underlying institutional loan at the same time the buyer makes payments on the new loan from the seller (installment plan). The new loan is at a higher interest rate than the underlying loan , so the seller makes a profit. Buyer must be careful of due-on-sale clauses (lender demands immediate payoff if real estate is transferred).
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