Purchase-Money Mortgage
A mortgage the buyer gives as part of the purchase price, commonly when the seller finances part of the sale.
A purchase-money mortgage is a loan used to buy the property, given by the buyer at the time of purchase. The term most often describes seller financing, where the seller takes back a note and mortgage for part of the price instead of receiving all cash.
Seller financing through a purchase-money mortgage can help a buyer who cannot obtain full institutional financing.
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- Mortgage
A security instrument that pledges real property as collateral for a debt. In Texas, lenders use a deed of trust to play this role.
- Wraparound Mortgage
A new, larger loan that wraps around an existing loan that stays in place, with the borrower paying the new lender who continues paying the old one.
This definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.