Finance
What is a 'purchase money mortgage' in Rhode Island?
AA mortgage used to purchase money-market securities
BA mortgage given by the buyer to the seller as part of the purchase price, where the seller finances part of the sale✓ Correct
CA government-backed first mortgage for first-time buyers
DA mortgage to buy land only, not improvements
Explanation
A purchase money mortgage is seller financing where the seller takes back a mortgage from the buyer for all or part of the purchase price. The seller essentially acts as the lender and holds a lien on the property.
People Also Study
Related Rhode Island Questions
- What is a 'purchase money second mortgage' in Rhode Island seller financing?Finance
- In Rhode Island, which type of lien takes priority over a first mortgage?Finance
- A mortgage in Rhode Island, under the title theory, means that the lender:Property Ownership
- A buyer in Rhode Island signs a purchase agreement containing a financing contingency. If the buyer cannot obtain financing, the buyer may:Contracts
- In Rhode Island, which type of mortgage foreclosure is most common, where the lender must obtain a court order to foreclose?Finance
- A Rhode Island buyer takes out an FHA loan. What is the minimum down payment required for an FHA-insured mortgage with a credit score of 580 or above?Finance
- A Rhode Island property is located in a FEMA-designated Special Flood Hazard Area (SFHA). What is required of the mortgage lender?Environmental
- An appraiser in Rhode Island determines that a property's value is $375,000. The purchase price was $395,000. What does this mean for an FHA loan?Property Valuation
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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Study This Topic
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →