A wraparound mortgage (or “wrap”) is a creative financing method that lets you sell your home while keeping your current loan in place — and it can help both you and your buyer win.
💡 What Is a Wraparound Mortgage?
A wraparound mortgage is when: • You (the seller) still have a loan on your home.
• You sell your home to a buyer who makes monthly payments to you.
• You continue making your original loan payments to your bank. Your new agreement with the buyer wraps around your existing mortgage — allowing you to earn a profit on the difference.
🧮 Example
Your current loan: $200,000 at 4% interest. You sell the home for $250,000 at 7% interest. The buyer pays you based on the $250,000 balance, and you keep paying your $200,000 mortgage — earning a monthly cash flow spread.
⚖️ Why Sellers Love Wraps
• Keep your low-interest loan working for you.
• Sell faster to buyers who can make payments.
• Earn monthly income from the spread. • Close without banks or appraisals.
🔍 Things to Handle Carefully
Wraps must be structured properly — always use a knowledgeable creative-finance attorney or title company. Be sure payments stay current with your original lender, and communicate clearly with your buyer.
✅ The Bottom Line
Selling “on a wrap” lets you turn your existing mortgage into an opportunity — generating income, helping a buyer, and keeping your great loan in place.
Disclaimer
This article is for educational purposes only and does not constitute financial or legal advice. Always consult with an attorney, CPA, or licensed professional before entering into any real estate transaction.
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