The president and owner of Miami, Florida-based, LendMe Mortgage LLC, Rick Pedrosa is adept at providing the right solution for people who want to purchase their own home. As a mortgage broker and lender, among the solutions Rick Pedrosa offers is a purchase money mortgage.
There are cases, such as a poor credit record, when a buyer cannot qualify for a bank loan amount that can complete the purchase of a home. In order to finalize the deal, a purchase money mortgage is used. As an example, to buy a house worth $450,000, $330,000 may come from a bank loan secured by a first mortgage on the property, $80,000 may be contributed by the buyer, and the balance of $40,000 would be supplied by the seller through a money purchase mortgage that takes out a second mortgage on the property.
In other instances, instead of the seller financing, another lender can come into the picture to provide the financing. As this type of mortgage typically substitutes for all or part of the money needed by the buyer to pay the seller, it is known as a purchase money mortgage.