What is the purpose of a purchase money mortgage?

The correct answer pertains to the purchase money mortgage, which serves a specific purpose during a real estate transaction. A purchase money mortgage is specifically designed to facilitate the financing of a property’s purchase by providing the buyer with funds to acquire real estate. This type of mortgage helps buyers by allowing them to borrow money from the seller or a lender to cover the purchase price of the property, effectively making the property accessible for ownership.

In contrast, options that describe enabling only interest payments, refinancing existing loans, or providing government-backed funds do not accurately reflect the primary function of a purchase money mortgage. The essence of this financing arrangement is its role in directly supporting the acquisition of real estate, thereby distinguishing it from other financing methods that target different financial needs or arrangements.