Wraparound Mortgage

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Wraparound Mortgage


A wraparound mortgage is when the seller leaves their current mortgage in place and finances the sale themselves. The new mortgage "wraps around" the old mortgage, with the buyer making payments to the seller and the seller making payments to the original lender.

Because most loans now have a "due on sale" clause, wraparound mortgages are relatively infrequent. A due on sale clause means the entire loan balance is due when the property is sold, preventing the seller from keeping the loan in place.

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