When a note and security instrument are combined in one document, this scenario is best described as:

The scenario described—where a note and security instrument are combined in a single document—is best characterized as a land contract. A land contract, also known as a contract for deed or installment sale agreement, involves the seller financing the property for the buyer. In this arrangement, the buyer makes payments directly to the seller over time, and the seller retains legal title to the property until the full purchase price is paid.

This combined document serves the dual purpose of establishing the debt obligation (the note) and outlining the security interest (the security instrument) all in one place. This simplifies the transaction as it clearly lays out the terms and conditions of the sale and the buyer's obligations without the need for separate documents.

In this context, a purchase money mortgage specifically relates to financing that enables a buyer to purchase a property and may not necessarily combine the note and security instrument into one document. A wraparound mortgage involves a second mortgage that includes the balance of an existing loan, while a deed of trust is a security instrument used to secure a debt without combining it with the note itself.