purchase money mortgage


Also found in: Legal, Acronyms, Encyclopedia.

Purchase-Money Mortgage

A mortgage in which the home buyer borrows from the seller instead of, or in addition to, a bank or thrift. Purchase-money mortgages usually are made when the buyer cannot qualify for an ordinary home loan due to lack of credit or income. Alternately, a seller may offer a purchase-money mortgage in a mortgage-takeover agreement, that is, when the sale price of the home is equal to what remains on the seller's own mortgage.

purchase money mortgage

(1) A mortgage loan used to purchase real estate. It may be seller-financing, institutional lender financing, or any other type,as long as the loan proceeds were used to purchase the property. Some states prohibit lenders from suing borrowers on purchase money mortgages if a foreclosure sale does not result in enough money to pay the debt in full. (2) Sometimes used to refer to a purchase money security interest in personal property.Personal property security interests are sometimes called chattel mortgages, hence the expression purchase money mortgage. (3) In bankruptcy, the debtor may not keep normally exempt assets without paying the creditor if the creditor has a purchase money security interest.

References in periodicals archive ?
It's critical to document a purchase money mortgage transaction carefully to ensure that your rights are protected and to facilitate a potential sale of the loan on the secondary market.
Because of this, efforts to address the inevitable market move to purchase money mortgages might have been put on the back burner.
A purchase money mortgage in the amount of $1,050,000 on a multi-family apartment building located in The Bronx N.
A purchase money mortgage in the amount of $1,000,000 on a multifamily apartment building located in Brooklyn, N.
A purchase money mortgage in the amount of $248,000 on a mixed-use building located in North Conway, N.
A purchase money mortgage in the amount of $430,000 on an apartment building located in Dover, NH.
A purchase money mortgage in the amount of $1,537,500 on a 16,892 s/f office building located in West Depford, New Jersey.
The lack of institutions extending real-estate financing has prompted the use of purchase money mortgages, better known as "seller financing.
The transaction was structured to deed 320 acres to each of the Hudspeths' two married children and their wives and 160 acres to their unmarried son in exchange for nonnegotiable notes and purchase money mortgages.
Section 128(b), which currently requires early good faith estimates of Truth in Lending disclosures in purchase money mortgages only, represents an exception to the general requirement that loan-specific Truth in Lending disclosures only need to be provided by consummation of the credit agreement (often at settlement).
ORLANDO - Marilyn Sperling, CEO of the $1 billion Greylock Federal Credit Union, told attendees at the 2015 NACUSO Conference that building strong relationships across all parts of the mortgage loan process is key to increasing market share of purchase money mortgages.
Q: So, the target for low-income single-family purchase money mortgages is slightly higher because the expected range is higher than recent experience--and this higher target is in the median range of expected originations?