Definitions for "WRAP AROUND MORTGAGE"
A refinancing technique involving the creation of a second mortgage which includes the balance due on any existing mortgages, plus the amount of the new secondary or junior lien.
the seller has an existing mortgage. The buyer arranges for seller financing. The amount of the seller financed loan covers the balance due on the existing mortgage, plus an additional amount to cover the balance due on the purchase price. The buyer makes mortgage payments to the seller. The seller continues to make the mortgage payments on the first mortgage and keeps the excess payment received from the buyer. The seller financed mortgage is called a Wrap Around Mortgage because it includes or wraps around the first mortgage.
a loan transaction in which the lender (usually the seller) retains responsibility for the existing mortgage