The sale price of a property is $100,000. The buyer pays $10,000 down and makes one payment of $268 on the existing loan balance of $50,000, bearing interest at 5%. The buyer then makes a second (monthly) payment of $253 to the seller on $40,000 owner-carried financing, bearing interest at 6.5%. What type of land contract is this an example of?

Question

Business

Elisha Huang

26 April, 21:55

The sale price of a property is $100,000. The buyer pays $10,000 down and makes one payment of $268 on the existing loan balance of $50,000, bearing interest at 5%. The buyer then makes a second (monthly) payment of $253 to the seller on $40,000 owner-carried financing, bearing interest at 6.5%. What type of land contract is this an example of?

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Answers (1)

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Maverick Morrow · Answer 1

straight land contract

Explanation:

Based on the information provided within the question it can be said that the type of contract that is being illustrated in this scenario is a straight land contract. This is a contract where the interest cannot be overrided and payments are not specific, meaning that you can go paying the contract off little by little but the interest will adjust accordingly.