Which type of loan provides seller financing as part of the purchase price?

A purchase money mortgage is a type of loan specifically used to finance the purchase of real estate, wherein the seller provides financing to the buyer as part of the sale. In this arrangement, the buyer typically pays the seller directly (or through a mortgage agreement) rather than obtaining the entire loan from a bank or financial institution. This method can make it easier for buyers who may not qualify for traditional financing while offering sellers a way to attract buyers or facilitate the sale of their property.

Seller financing can be beneficial in various scenarios, such as when buyers have non-traditional income or credit issues, or when the seller wishes to expedite the sale without waiting for bank approval. This type of financing can also include negotiable terms such as down payment amounts, interest rates, and repayment schedules, which appeals to both parties involved in the transaction.

In contrast, package loans involve financing multiple items (like a home along with appliances), straight loans are characterized by equal payments of principal and interest, and traditional bank loans are secured through financial institutions rather than involving private seller financing.