Posted by wpage on January 23, 2002 at 13:08:17:
Mr. Garcia would a wrap around mortgage trigger a due on sale clause if I took ownership to the property? Also, how would you handle the payment? The seller could take your money and not make the payment on the 1st. mortgage! Also, how would you handle the 1st. mortgagee. Would they be notified? thanks in advance
what is a wrap-around mortgage - Posted by jim
Posted by jim on January 22, 2002 at 20:43:03:
Can anyone explain a wrap to a complete beginner? I’ve read explanations in books and can’t grasp it. I need an explanation as if to a 10-year old, preferably with one or more very simple examples.
Do you retain ownership? Then lease-option?
What up? Any help greatly appreciated. Thanks in advance.
Re: what is a wrap-around mortgage - Posted by Ed Garcia
Posted by Ed Garcia on January 23, 2002 at 24:27:38:
Jim,
Wrap-around Mortgage
A Wrap-around Mortgage, is when the seller creates a new loan, encompassing their existing loan or financing, should they have a second mortgage as well as a first.
Example: The sale of a $100,000 property with a $20,000 cash down payment by the buyer and an assumable senior loan balance of $60,000, creating a $20,000 shortage, can be financed by the seller who would carry back a new wraparound loan for $80,000. This
wrap-around would require the borrower to make the payment on the $80,000 while the seller would retain the responsibility for making the required payment on the undisturbed existing $60,000 loan.
I hope this helps,
Ed Garcia