Purchase Money Mortgage

Mortgage given by a buyer in lieu of cash for the purchase of property. Such mortgages make it possible to sell property when mortgage money is unavailable or when the only buyers are unqualified to borrow from commercial sources.

Loan from a seller in lieu of cash for the purchase of property. Such mortgages make it possible to sell property when mortgage money is unavailable or when the only buyers are unqualified to borrow from commercial sources.

A Mortgage given by a Grantee (buyer) to a Grantor (seller) in part payment of the purchase price of Real Estate.
Example: Lamar wishes to purchase a house from Murphy. The sale price is $175,000. Lamar will assume Murphy's existing mortgage in the amount of $100,000. In addition, Lamar gives Murphy a purchase money second mortgage of $50,000, plus $25,000 in cash to close the sale.

Note: a purchase money mortgage can be a First Mortgage or junior lien, depending on its Priority.

A mortgage that secures a loan the proceeds of which are used to finance the purchase of property. Colloquially, the term generally is employed only to denote a mortgage taken by the seller of property to secure later payment to him of the unpaid portion of the purchase price.

A security device entered into when the seller of property, as opposed to a bank or financial institution, advances a sum of money or credit to the purchaser in return for holding the mortgage on the property.

The seller of the property, rather than a lending institution, is the mortgagee. These mortgages are given concurrently with the conveyance of the land or the transfer of the items sold.