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

    A document signed by a lender stating the outstanding amount ...
  2. Seller Financing

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

    An individual or company who borrows money to purchase a piece ...
  4. Mortgage Originator

    An institution or individual that works with a borrower to complete ...
  5. Assumable Mortgage

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

    An entity that lends money to a borrower for the purpose of purchasing ...
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  1. Can FHA loans be used for investment property?

    Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements ... Read Full Answer >>
  2. Do FHA loans have private mortgage insurance (PMI)?

    he When you make a down payment from 3 to 20% of the value of your home and take out a Federal Housing Administration (FHA) ... Read Full Answer >>
  3. How many FHA loans can I have?

    Generally, the Federal Housing Administration (FHA) does not insure more than one mortgage per borrower. This is to prevent ... Read Full Answer >>
  4. Are FHA loans assumable?

    Loans insured by the Federal Housing Administration (FHA) on or after Dec. 15, 1989, are assumable by qualifying borrowers. ... Read Full Answer >>
  5. How accurate are online mortgage calculators?

    Online mortgage calculators are accurate to the extent that the calculator itself is asking for the right pieces of information ... Read Full Answer >>
  6. Are mortgage rates negotiable?

    Mortgages are just as negotiable as any other product or service. Whether it's a new home purchase or refinancing of an existing ... Read Full Answer >>

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