Question

William buys a house for $500,000 from Keith Geller through a realtor. He makes a down payment of $200,000. He borrows the rest from Smith and Sons, a lending firm, and places his new house as collateral for the loan. Who is the creditor in this case?

A) William
B) Keith Geller
C) Smith and Sons
D) the realtor

Answer 1

Answer:

Option C Smith and Sons

Explanation:

The reason is that the person who lends the money is a lender or creditor, whereas the person who borrows money from the creditor is a debtor or a borrower. In this case, William borrowed money so he is the debtor and the person who lend money to William are Smith and Sons, so Smith & Sons are the creditor in this case.