One of the types of home loans is the “purchase money mortgage.” It enables someone to purchase a new property, including investment property, second home, and principal residence. It cannot be denied that you need to have a heavy budget when you are planning to purchase a home in cash. But, if you don’t have the budget, you might be searching for some ways to get the financing. One of these ways is filling up the application form for a purchase money mortgage at

Unluckily, not all of us have enough money for an outright purchase. So, some consider lending for a mortgage or file a debt to the bank to obtain the financing.

The Benefits of Applying for Purchase Money Mortgage Loans

  • Compared to the refinance rates, the home purchase has less expensive or lower interest rates.
  • Regardless of the condition of your credit score, you can apply for a money mortgage loan
  • It provides you with the highest LTV limits
  • Their underwriting guidelines are very flexible, which is beneficial for those who would like to apply.

What makes money mortgage loans stand out among the others is that its mortgage underwriting guidelines are flexible. This means that you could get the benefits of the LTV ration (Loan-to-Value Ratio) if you will use the money for purchasing a home property.
There are some programs that offer home purchase financing requiring you to make a down for as little as 3.5 percent. These specialty programs include the FHA and Fannie Mae’s HomeReady program. Most of these programs provide their clients with grants and gifts despite the low down payment. In addition to that, VA loans and USDA loans can be availed without requiring down payments.

Lower Interest Rates


Another advantage you can get from availing home mortgage loans is that it has a lower mortgage interest rate. Home mortgage loans usually offer various pricing incentives, such as rebates. This means that your home purchase loans enable you to enjoy their lowest interest rates. If you have a current mortgage and you want to refinance it, your mortgage lenders will make an agreement about the price adjustments. As a result, it can possibly close the cost or/and increase your existing mortgage rate.

When you avail of the home purchase mortgage, you don’t need to worry about the pricing hit. Aside from that, home mortgage lenders might also offer you a pricing rebate. In some cases, your lenders might also give you some purchase promos. These might be .25 percent of the credit, which will help you to handle your overall closing costs.

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A home purchase mortgage is divided into different types, similar to a home loan. There are other types of a home mortgage, including a fixed-rate mortgage or adjustable-rate mortgage. Aside from that, it also offers different terms, including 15 years or/and 30 years option. After taking your initial mortgage, you can still avail of or apply for a second mortgage. In this case, it is called as purchase money second mortgage or piggyback second.

Closing the two forms of home purchase mortgage concurrently is important. Through this, different banks enable you to give lower down payment for your home purchase. Aside from that, it also protects you from having mortgage insurance, especially if your initial mortgage has an LTV lower than 80 percent. An initial mortgage that has LTV lower than 80 percent usually has a reduced interest rate, considering the borrower wants to apply for a higher LTV loan.

Keep in mind that obtaining finance with the purchase-money subordinate mortgage, refinancing of your initial mortgage would be possible. Aside from that, it can also be possibly known to be a term and rate refinance. Consequently, a higher or more favorable LTV limit will be offered.

The Influencers when Getting Your Initial Home Purchase Mortgage


There are a lot of home purchasers who are encouraged to apply for a home purchase mortgage because of their real estate agents. Some agents provide you with a list of their preferred lenders without considering the shopping interest rates as well as the other lenders. Also, it is not your obligation to utilize any lender or bank you prefer.

Furthermore, be sure to search for multiple rate quotes or other lenders.

If you are planning to purchase your first property or you want to apply for a home purchase mortgage, ensure that you perform thorough research before shopping. Get at least three homes as your options.

If you are going to rely on the recommendations of your real estate agent, usually, they would provide you with a list of their preferred lenders. That being said, getting multiple independent quotes is important to determine how they work.

To get the best out of the mortgage rates, we recommend you to do your research or ask for the recommendations of your mortgage brokers, credit unions, rival banks, and local banks. Through this, you can compare the different loan programs available and get the one that suits you.

If this is the case, it is important that you will work with a reliable mortgage lender. In other words, we recommend you not to work with a bank that only provides you with a lower interest rate. In terms of refinancing, making mistakes is normal. But, when it comes to home purchase mortgages, it is composed of the timeline and guidelines that need to be followed strictly. Note that mistakes will cost you a lot. Certainly, no one wants to lose a large amount of money while purchasing a new property because of working with an unreliable lender.



To conclude, seller financing can be used for defining a purchase money mortgage, a process of looking for a home seller who is willing to provide a fair rate of financing. Losing your loan is okay as you can opt for refinancing each and every time you want. But, losing your purchased property can make you feel bad and stressed, considering that finding another that looks like and feels like it would be impossible.