Check Your Understanding-Answers
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Define a purchase money mortgage.
- With a purchase money mortgage, the buyer borrows from the seller in addition to the lender. This is sometimes done when a buyer cannot qualify for a bank loan for the full amount; so the seller "takes back" a portion of the purchase price as a second mortgage. A purchase money mortgage can also be a first mortgage.
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What's the difference between a lease purchase and a lease option?
- In a lease purchase arrangement, a tenant enters into two agreements simultaneously - an agreement to purchase and a lease.
- A lease option is a clause in a lease that gives the tenant the right to purchase the property under specific conditions -usually at a predetermined price and within a set period of time.
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Greg and Joyce purchased a home from the builder who offered to pay $5,000 at closing as an incentive to get them to buy. What kind of mortgage might they get?
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What are grant programs typically used for?
