Question

Buyer A borrows money to buy a house. As part of the repayment plan, when he sells the house he will have to turn over a portion of the profit he makes on the house to the lender. This type of mortgage is called a_____

Answer 1

A shared appreciation mortgage is a type of mortgage where the lender receives a portion of the profit made by the borrower when they sell the house.

Step-by-step explanation:

This type of mortgage is called a shared appreciation mortgage.

A shared appreciation mortgage is a type of mortgage where the lender receives a portion of the profit made by the borrower when they sell the house.

This allows the lender to benefit from any increase in the value of the property, in addition to the interest payments made by the borrower.

For example, if Buyer A buys a house for $200,000 and sells it for $300,000, the lender may be entitled to a percentage of the $100,000 profit, such as 30%. So the lender would receive $30,000 from the sale.