In a Wraparound Mortgage?
The Sellers of a Home Keep Their Mortgage Active. the Buyers Then "Wrap" Their New Mortgage Around the Sellers' Existing Home Loan. the Oddity Here Is That the...
In a wraparound mortgage, the sellers of a home keep their mortgage active. The buyers then "wrap" their new mortgage around the sellers' existing home loan. The oddity here is that the sellers, and not a bank or lender, are providing the mortgage and title directly to the buyers.
What is the main advantage of a wraparound mortgage?
The main benefit of a wraparound mortgage is the ability for an investor to purchase property, even if they have poor credit.
Is wraparound mortgage a good idea?
Wraparound mortgages are useful during slow housing markets and when a buyer doesn't have the necessary credit to secure a traditional mortgage. And while a seller can turn a nice profit, this kind of loan does pose some risks to both the seller and the buyer.
Sarah Jenkins is a veteran tech journalist with over 12 years of experience covering artificial intelligence, mobile innovations, and digital ethics. Her insights have appeared in leading technology publications worldwide.
