How to Get a Wraparound Mortgage for a Home
- 1). Write an offer on a property. Include the amount of down payment you'll be making and subtract that from the purchase price. That will be the amount of the wraparound mortgage you're seeking.
- 2). Agree with the seller upon an interest rate you're willing to pay on the wraparound mortgage. Typically the interest rate will be close to that of a rate from a regular lender, but it may be a bit higher to compensate the seller for his or her financial assistance. The seller may request a copy of your credit report.
- 3). Get a copy of the note on the seller's existing loan. It's best if the existing first mortgage is a fixed-rate one, but you can still wrap an adjustable-rate first mortgage.
- 4). Open an escrow with a title company or hire a real estate attorney to handle the transaction.
- 5). Arrange a closing date.
- 6). Establish the exact balance owed on the first mortgage as of the closing date. The attorney or escrow officer will calculate this information.
