So what exactly is a Purchase Money Mortgage and who is it right for?  Even if the seller wants the buyer’s credit report, the indicator for the buyer’s eligibility is more flexible than those by the conventional lenders.

For payment options, buyers may choose from interest-only, fixed-rate amortization, less-than-interest, or a balloon payment.

Based upon a borrower’s needs and seller’s discretion the buyers may mix or match the payments, also the interest rates may periodically adjust or remain constant.

The buyer can negotiate down payments. If the buyer is unable to manage a larger down payment that the seller quotes, then the seller may allow the buyer to make periodic lump-sum payments toward the down payment.

Closing costs are also lower. Since this is minus an institutional lender, the buyer doesn’t need to pay for the loan or discount points or origination, processing, administration, or other fees, which lenders usually charge.

Unlike the conventional loan, buyers are not dependent on lenders for financing, resulting in closing the deal faster and receive possession much earlier.

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