Question 83

Contract for deed is the best loan option for the seller.

A contract for deed allows the seller to finance the purchase of the home while retaining the title until the buyer has fulfilled the terms of the loan, making it the most suitable option in this scenario.

A) Asset integrated mortgage

An asset integrated mortgage does not specifically address the seller's desire to retain title. Instead, it focuses on integrating different financial resources, which does not provide the security of title retention that the seller requires.

B) Wraparound mortgage

A wraparound mortgage involves the seller maintaining an existing mortgage while providing financing to the buyer. This option does not enable the seller to retain title in the same direct manner as a contract for deed, as it typically involves transferring some rights to the buyer.

C) Contract for deed

A contract for deed is the ideal choice in this situation, as it allows the seller to retain legal title to the property while the buyer makes payments. Ownership is only transferred once the loan balance is fully paid, aligning perfectly with the seller's intention to keep title until the debt is settled.

D) Subordination of deed

Subordination of deed refers to the process of changing the priority of liens on a property. This option does not provide a financing structure or address the seller's need to keep the title until the loan is repaid, making it irrelevant to the scenario at hand.

Conclusion

The contract for deed is the most effective option for the seller to provide financing while retaining title until the loan is paid off. Other options, such as the asset integrated mortgage, wraparound mortgage, and subordination of deed, fail to meet the seller's requirement for title retention and do not offer the same level of security during the financing period.