What is it called when the seller of a property provides a loan to the buyer to help finance the purchase price?

The correct answer, a vendor take-back mortgage, refers to a financing arrangement where the seller of a property provides a loan to the buyer to assist in financing the purchase. In this scenario, the seller essentially acts as a lender, allowing the buyer to acquire the property even if they might not qualify for traditional bank financing. This arrangement can make the property more attractive to buyers, especially in situations where the market is competitive or when buyers have difficulty securing sufficient funds through conventional lending methods.

Vendor take-back mortgages often include terms that are mutually agreed upon between the seller and buyer, covering aspects such as interest rates, repayment terms, and the amount of the loan. By providing this type of financing, sellers can expand their pool of potential buyers and potentially achieve a quicker sale.

Other terms in the question refer to different types of financing. A home equity loan allows homeowners to borrow against the equity in their property. A bridge loan is a short-term financing option typically used to bridge the gap between purchasing a new property and selling an existing one. A second mortgage is an additional loan taken out on a property that already has a mortgage, allowing homeowners to access additional funds based on the equity they have built. While these options are related to financing, they do not specifically