Wrap Around Mortgages

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Could someone explain to me how a wrap around mortgage works?

I just made an offer on a house (owner financed) and discovered that he still has a underlying loan.

rolleyes

Comments(6)

  • jeff120023rd May, 2004

    try this one,

    http://www.thecreativeinvestor.com/ViewTopic26873-19-7.html

    Hope it helps.
    Jeff

  • deblica5th May, 2004

    I looked at that web site. Thanks. It only uses the term "wrap around mortgage" once.

    Can anyone post their experiences with this?

  • jeff120025th May, 2004

    The explanation of how it works is included in that post.
    What's not said there is that this is used as a tool for investors as a way to provide owner financing to clients. In exchange for providing this opportunity, we can collect generally slightly higher interest rates on a higher balance that the underlying loan, thereby creating a positive cash flow for the investor. If you are thinking of purchasing a home this way, you should be aware that you will likely be paying a premium for the property, at higher than market rates. If this is the only way you can get financing, it may be a good deal for you. If you can qualify for your own financing, it may be in your best interest to do so. See what interest rate they are offering, and if the purchase price seems fair. Then shop around. The proper course of action will become evident to you is you do your due dilligence.

  • deblica5th May, 2004

    This is an out of state elderly owner that does not know much about creative financing. He has a newbie realtor that also does not know much, thereby unable to educate the seller.

    I had my realtor write up an offer to do a wrap around mortgage. I understatnd it when I read the Carleton Sheets course...it sounds simple enought. My realtor has dealt with these types of offers before and is trying to educate the seller and his agent. I asked the seller to finance at 7% interest.

    I wanted to get view points from people that have gotten involved with wraps.
    Again, thanks for your input....

  • deblica5th May, 2004

    This is an out of state elderly owner that does not know much about creative financing. He has a newbie realtor that also does not know much, thereby unable to educate the seller.

    I had my realtor write up an offer to do a wrap around mortgage. I understatnd it when I read the Carleton Sheets course...it sounds simple enought. My realtor has dealt with these types of offers before and is trying to educate the seller and his agent. I asked the seller to finance at 7% interest.

    I wanted to get view points from people that have gotten involved with wraps and learn your first hand experiences.

    Again, thanks for your input Jeff12002.

  • deblica5th May, 2004

    This is an out of state elderly owner that does not know much about creative financing. He has a newbie realtor that also does not know much, thereby unable to educate the seller.

    I had my realtor write up an offer to do a wrap around mortgage. I understatnd it when I read the Carleton Sheets course...it sounds simple enought. My realtor has dealt with these types of offers before and is trying to educate the seller and his agent. I asked the seller to finance at 7% interest.

    I wanted to get view points from people that have gotten involved with wraps and learn your first hand experiences.

    Again, thanks for your input Jeff12002.

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