Wrap around mortgage
A wrap around mortgage is a special kind of mortgage deal, in this deal a lender buys an junior mortgage which „wraps“ an already existing mortgage as an addition to other kinds of mortgage deals made before. In a wrap deal the seller of the mortgage accepts a promissory note from the purchaser of wrap deal due the mortage bought up to the remaining balance of money.
Wraps are a sort of self-financing, they make it easier to be an owner of a real property or make it faster to buy a real estate. The new owner of the mortgage is fully responsible for making the monthly payments to the provider of the mortgage. This is also a form of secondary financing to tackle the barriers of an existing mortgage deal.
Before making a wrap around mortgage deal you should check if the legislation of you country has a due on sale clause on mortgage deals, because in case of this law a wrap around deal might be against the law. As a wrap around deal is considered to be a complex financial process, it is recommended to consult a financial advisor before going on with it.