Wraparound Mortgage Financial Glossary

What is it? A loan arrangement in which an existing loan is retained and an additional loan is combined with the existing loan. The new lender accepts the obligation to make payments on the old loan. The existing loan generally carries an interest rate below the rate on new loans. Sellers are the most common wraparound lenders. (Technically, a wraparound is a second or junior mortgage, but for this survey, it is treated as a first mortgage.)

Finance Term Definition Added By: Brandon

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