Purchase-Money Mortgage


DEFINITION of 'Purchase-Money Mortgage'

A mortgage issued to the borrower by the seller of the home as part of the purchase transaction. This is usually done in situations where the buyer cannot qualify for a mortgage through traditional lending channels. This is also known as seller or owner financing.

BREAKING DOWN 'Purchase-Money Mortgage'

A purchase-money mortgage might be offered by the seller as incentive to purchase a property. This can be used in situations where the buyer is assuming the seller's mortgage, and the difference between the balance on the assumed mortgage and the sales price of the property is made up with seller financing.

  1. Reduction Certificate

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  2. Seller Financing

    A real estate agreement where financing provided by the seller ...
  3. Mortgage Originator

    An institution or individual that works with a borrower to complete ...
  4. Mortgagor

    An individual or company who borrows money to purchase a piece ...
  5. Mortgagee

    An entity that lends money to a borrower for the purpose of purchasing ...
  6. Assumable Mortgage

    A type of financing arrangement in which the outstanding mortgage ...
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