What financing technique involves the buyer borrowing from the seller as well as the lender?

The financing technique that involves the buyer borrowing from both the seller and the lender is referred to as a purchase money mortgage. In this scenario, the seller provides financing to the buyer in addition to the primary loan obtained from a traditional lender. This structure facilitates the transaction when the buyer may not have enough cash for the full purchase price or when the seller's terms are more favorable than those offered by conventional lenders.

In the case of a purchase money mortgage, the seller typically takes back a note for a part of the purchase price, which results in a second mortgage on the property. This arrangement allows the buyer to borrow more capital, making it easier to complete the purchase, and can also attract buyers who might not qualify for full financing through standard lending practices.

This option effectively combines both the seller's and the lender's financing, reflecting a partnership in the financing of the property. It provides flexibility for both parties, as sellers may be motivated to sell and may offer competitive loan terms to facilitate the sale.