An arrangement by which the seller finances the sale and deeds the property to the buyer at closing is which of the following?

• A. Purchase money mortgage
• B. Deed in lieu
• C. Assumable mortgage
• D. Wraparound mortgage

Answer: (A)

The main idea here is seller financing, where the seller acts as the lender for the buyer. In a purchase money mortgage, the seller provides the funds to complete the purchase, and at closing the title passes to the buyer while the buyer signs a promissory note and a mortgage back to the seller. The buyer then makes regular payments to the seller, just as they would to a bank, with interest and for a set term. The security for the loan is the property itself.

This setup fits the description precisely: the seller finances the sale and the deed transfers to the buyer at closing, with the seller holding a lien through the mortgage/promise to be repaid.

The other options describe different arrangements. A deed in lieu involves giving the property back to the lender to avoid foreclosure, not seller financing. An assumable mortgage means the buyer takes over an existing loan with the lender’s approval, rather than the seller providing new financing. A wraparound mortgage is another form of seller financing that wraps a new loan around an existing one, but the classic term for financing the sale and transferring the deed at closing is purchase money mortgage.