Property Ownership
What is a 'purchase money mortgage' in Illinois real estate?
AA mortgage taken out to purchase lottery winnings
BA mortgage given by the buyer to the seller (or lender) at the time of purchase as part of the transaction✓ Correct
CA government mortgage specifically for purchasing primary residences
DAny mortgage loan used to purchase real property
Explanation
A purchase money mortgage is a mortgage given by the buyer to finance the acquisition of property—it is created at the same time as the purchase. When given to the seller (seller financing), it is a purchase money mortgage held by the seller.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Math Concepts
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