A purchase mortgage can also be called a purchase money mortgage and it’s a mortgage that is issued to the borrower by the seller as part of the purchase transaction. A purchase mortgage can also be called owner or seller financing. This is done in situations where the buyer isn’t able to qualify for a mortgage through a traditional lender. It can also be used in a situation where a buyer is assuming the seller’s mortgage. The difference between the balance on the assumed mortgage and the sale price of the home is made up with seller financing.

It is unlike a traditional mortgage. Instead of getting a mortgage through a bank, a buyer provides the seller with a down payment and then gives a financing instrument to show as evidence of a loan. This instrument is recorded in public records in order to protect both parties. There are both benefits for lenders and sellers.

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