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

Question

3 years ago

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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?

Business

1 answer:

taurus [48] · Answer 1 · 2022-02-12T04:06:35+03:00

Answer:

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.