Finance
In Wyoming, a 'purchase money mortgage' is:
AA mortgage obtained from a bank to purchase property
BSeller financing where the seller takes back a mortgage from the buyer as part of the purchase price✓ Correct
CA government-backed mortgage for first-time buyers
DA mortgage used to purchase a business
Explanation
A purchase money mortgage (seller carryback or owner financing) occurs when the seller provides financing to the buyer, taking back a promissory note and mortgage (or deed of trust) as security for part of the purchase price. It is an alternative to bank financing.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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.
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