In certain situations, a purchase money loan is the top option to hit the target of meeting your financial needs. Here’s how to determine if it’s right for you:
In the simplest terms, a purchase money loan is a loan used to buy a home. It’s a mortgage funded by the bank for the explicit purpose of acquiring a home. The bank backs the purchase price, less the buyer’s down payment.
With so many different loan options out there, it’s not surprising that many people can’t differentiate between them. A purchase money loan is different, in that it is money borrowed for a specific purpose; namely, financing the purchase of a house. This unique “purchase money” purpose is what gives mortgages their name.
You need good credit to obtain this type of loan, as it’s typically for quite a significant amount of money. You also need to have enough money saved up to provide a sufficient down payment, and you need to demonstrate an ability to make future payments. This can be done when you present your financial history for evaluation, including current income and proof of minimal outstanding debt.
If you have additional questions about purchase money loans and the benefits they can offer you, contact the experts at Midlands Mortgage Corporation.