Purchase - Money Commercial Hard Money Loans

A purchase money mortgage is a commercial hard money loan where the buyer borrows money from the vendor to help fund the acquisition of a home. The borrower can obtain the purchase-money mortgage from a bank, a credit union, or even a private source of funding. If the borrower can get a portion of the fund, then the money borrowed from the vendor can be used to make up the difference.

To let the buying public that they are ready to help finance the purchase of their homes, many sellers will market their property as a vendor- funded or as owner financed.

The purchase –money loan is different from commercial hard money loans because commercial hard money loans are granted based on the equity of the property and not necessarily the borrower’s credit history.

Advantages of purchase- money loans

A seller that faces high competition may need to get creative to sell his or her house. There are several benefits of purchase- money loans to both the seller and the buyer.

• For the sellers, the purchase money loan is valuable because they can increase the number of individuals that can buy their house.
• For the buyer, they may select from payment choices such as interest only, fixed rate paying back, less-than-interest or even a balloon payment. Down payments are negotiable.