Wraparound Mortgage Flashcards
1
Q
What is a wraparound mortgage?
A
Known as “wrap”, is type of secondary financing for the purchase of real property.
OR
Seller to finance a portion of a home loan that is “wrapped around” the seller’s existing mortgage
2
Q
What is a junior mortgage?
A
Often refers to a second mortgage, but it could also be a third or fourth mortgage. Refers to property of liens: in the case of foreclosure, the senior mortgage will be paid down first, then the junior mortgage’s are paid based on the date they were recorded.
3
Q
What is seller financing?
A
Seller finances purchase directly with the buyer
4
Q
What are seller financing deals?
A
Don’t require the principal amount to be exchanged upfront.
5
Q
What is an alienation clause?
A
Seller to repay the original mortgage entirely.
