Loan programs
Purchase money mortgage
A mortgage the buyer gives back to the seller as part of the purchase price
The seller delivers the deed and takes a mortgage for part of what is still owed, so the buyer gets title on the day of closing and the seller becomes the lender. It is the main alternative to a land contract when a seller finances a sale.
Easily confused with
Under a land contract the buyer holds equitable title only and legal title stays with the seller until the price is paid.
How the exam asks about it
Title passes at closing. That single fact is the difference from a land contract, where the seller keeps legal title until the last payment is made.
Quick check: Purchase money mortgage
One question. Pick an answer to see the explanation.
Which term is being defined: “A mortgage the buyer gives back to the seller as part of the purchase price”?
Related terms
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