Apply for a Wrap-Around Mortgage Online | Your Credit Advisor

How to Get a Wrap-Around Mortgage

What it is

A wrap-around mortgage is a loan in which the lender assumes responsibility for an existing mortgage. This occurs when a borrower has a mortgage on one home with a first lender, sells the home to a third party, and then pays the down payment on a second home and borrows a higher amount on a second mortgage to a second lender. The second mortgage actually wraps around the first mortgage because the new lender makes the payments on the first mortgage. Lenders can use this scenario to leverage a lower interest rate on the existing mortgage into a higher yield. Usually the lender is also the seller of the property.

A wrap-around mortgage is one type of seller financing. Another method is called a second mortgage, in which the borrower goes through the same institution for both mortgages. The difference is that with a second mortgage the first mortgage is repaid, whereas with the wrap-around mortgage the first mortgage isn't. Wrap-around mortgages are used to circumvent restrictions on assuming loans. Home sellers who do this violate the original contract with the lender. In many states, escrow companies are required by law to inform a lender whose loan is being wrapped.

Who it's for

A wrap-around mortgage is attractive to sellers who will acquire a high-yielding investment. This investment comes at a high risk with the seller having less equity and being responsible for the original loan. The seller's credit usually deteriorates as a result.

What you need to do to apply

In order to obtain a wrap-around mortgage, interested applicants will need to contact a local lending institution and inquire about the different options and rates available. Personal and financial history, including a credit report, will need to be made available to the lending institution. A property appraisal may also be required.

Apply for a Wrap-Around Mortgage

Popular Credit Cards

Recommended Credit Card

The Platinum Card® from American Express

The The Platinum Card® from American Express is one of the most popular cards available. Your Credit Advisor recommends it as our favorite in this category.

25,000 Membership Rewards® points when you spend $1,000 during your first three months of Card membership
GLOBAL Travel benefits: Priority Pass select airport club access, No Foreign Transaction Fees, Global Entry expedited U.S. immigration pass
Up to $200 in Airline Fee Credits annually to cover incidental charges on your airline of choice, including checked-baggage fee
24/7 Platinum Card® Concierge service for assistance with reservations, travel, gifts, and more
FINE HOTELS & RESORTS Program: exclusive upgrades and amenities at over 700 boutique, resort, and luxury hotels worldwide
Apply online now at American Express's Web site.

Intro APR	Regular APR	Credit Needed	Annual Fee
No Introductory Rate Available	No APR	Very Good	$450

Citi® Platinum Select® MasterCard®

0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the APR will be 11.99%-21.99% based upon your creditworthiness.
Extra Cash from Citi: enjoy discounts on gift cards, travel, merchandise and more
Citi® Identity Theft Solutions
Secure, free online account management
No annual fee*
Read our review or apply online now at Citibank's Web site.

Intro APR	Regular APR	Credit Needed	Annual Fee
0% Intro APR*	11.99% - 21.99%* (Variable)	Very Good	$0*

Starwood Preferred Guest® Credit Card from American Express

Starpoints® Bonus: 10K with your first purchase and another 15K when you spend $5k within 6 months - enough for up to 6 free nights at a Category 1 or 2 hotel
Free nights, free flights: Redeem Starpoints with over 350 airlines through SPG Flights and more than 1,000 hotels and resorts worldwide. No blackout dates
2011 SmarterTravel® Award for "Best Travel Rewards Card"
$0 introductory annual fee for the first year, then $65
Read our review or apply online now at American Express's Web site.

Intro APR	Regular APR	Credit Needed	Annual Fee
No Introductory Rate Available	15.24% - 19.24% variable	None	$65*

IberiaBank Visa® Classic Card

No Annual Membership Fee
Low variable rate of 7.25%, 10.25%, or 13.25% (Prime + 4.00%, Prime + 7.00%, or Prime + 10.00%) as of 4/1/10 based on the creditworthiness. This APR will vary with the market based on the Prime Rate. (If there is an interest charge, the charge will be no less than $1.00).
Low Introductory APR on balance transfers of 1.99% for your first 6 billing cycles, this rate will not change during the introductory period. Applies to balance transfers processed within three months of your account open date. After that, your APR will be the same as your assigned purchase rate, based on your creditworthiness.
Online Access to Credit Card Account Information
Apply online now at the card issuer's Web site.

Intro APR	Regular APR	Credit Needed	Annual Fee
1.99% APR for 6 Months	7.25%, 10.25%, or 13.25%*	None	$0

American Express® Gold Card

Earn 10K Membership Rewards® points, redeemable for select gift cards valued at $100, when you spend $1,000 in your first 3 months of Card membership
Exclusive access to Gold Card Events - select concerts, shows, major sporting events, and more
Purchase Protection covers loss, theft, and damage of eligible items within 90 days of purchase
Redeem Membership Rewards® points for an exclusive array of travel, shopping, dining and entertainment rewards.
Get approved in 60-seconds.
Read our review or apply online now at American Express's Web site.

Intro APR	Regular APR	Credit Needed	Annual Fee
No Introductory Rate Available	No APR	Good	$125

Copyright © 2006–2012 Your Credit Advisor
About | Contact | Privacy Policy | Sitemap