Glossary

Purchase Money Mortgage

A mortgage or trust deed given as all or part of the purchase price for real property.In some states the purchase money mortgage or trust deed loan can be made by a seller who extends credit to the buyer of property or by a third party lender (typically a financial institution) that makes a loan to the buyer of real property for a portion of the purchase price to be paid for the property. In many states there are legal limitations upon mortgagees and trust deed beneficiaries collecting deficiency judgments against the purchase money borrower after the collateral hypothecated under such security instruments has been sold through the foreclosure process. Generally no deficiency judgment is allowed if the collateral property under the mortgage or trust deed is residential property of four units or less with the debtor occupying the property as a place of residence.Purchase money mortgage – A mortgage given concurrently with a conveyance of land on the same land, by the vendee to the vendor, to secure the unpaid balance of the purchase price.Purchase money mortgage – A mortgage that is given in part payment of the purchase price as security for repayment of funds.Purchase Money Mortgage – (PMM) A note secured by a mortgage or trust deed given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate.