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What is a Wrap MortgageDeal?

Make $$ off of other people's $$

A Wrap Mortgage Deal is a unique form of seller financing in which a new mortgage is "wrapped" around the existing one on the property. Think of it as similar to sub-leasing in the rental market. In this arrangement, you can sell your house at an improved price while simultaneously earning interest on both your equity and the equity owned by the bank. This innovative approach enables sellers to leverage their existing mortgage to maximize their returns, making it a compelling option for those seeking flexibility and profitability in their real estate transactions.

Why Should I Want a "Wrap Mortgage" Deal and How Does It Wor

How it works

Let's break it down with a simple example. Suppose you owe $50,000 on your house with a 3% interest rate, and the property is valued at $90,000. However, you want to sell it for $100,000. In a wrap mortgage deal, you position yourself as the lender by creating an additional mortgage "wrapped" around the existing one. You then sell us the house for $100,000 with a new mortgage at a 5% interest rate.

Here's where it gets interesting: You earn 5% interest on the original $50,000 you own, and an additional 2% interest on the remaining $50,000, which represents the bank's equity. Essentially, you're making a profit on both portions of the sale.

In practical terms, we'll issue you a substantial check each month for the wrap mortgage, while you continue to make smaller payments to the bank for the original mortgage. The difference between what you receive and what you pay becomes your profit, allowing you to pocket the excess funds. This streamlined approach maximizes your returns and provides you with a steady income stream from your property investment.

Why should i want a "Wrap mortgage" deal?

A wrap mortgage presents a win-win scenario for all parties involved. As the seller, you can achieve the sale price you desire while earning interest on both your equity and the bank's equity. Meanwhile, we benefit by acquiring a quality property with favorable financing terms.

This type of deal is particularly appealing for sellers who already have a favorable interest rate on their existing mortgage. By leveraging a wrap mortgage, you can capitalize on your property's value and generate additional income without the need to sell outright.

Ultimately, a wrap mortgage offers a rewarding and mutually beneficial solution that allows you to maximize your returns and enjoy the satisfaction of a successful real estate transaction. It's a win-win situation, with you emerging as the primary beneficiary.