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REALTOR® Laura Sellers, Auburn, ALREALTOR® Laura Sellers, Auburn, AL

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LauraSellers01@Gmail.com
334-332-7263 Direct

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Should You Offer a Wrap-around Mortgage to Your Homebuyer?

Should You Offer a Wrap-around Mortgage to Your Homebuyer?

Sellers: considering offering a wrap-around mortgage to your homebuyer? While there are risks, this option often works out better for sellers compared with a cash sale. If you have questions or need recommendations, I am here to help

Wrap-around financing is a type of seller financing used to facilitate the sale of real estate. If the seller has a mortgage, they can continue to pay off their original loan while extending financing to the buyer. The seller’s loan to the buyer “wraps around” the original loan at a higher interest rate than the seller is currently paying, giving the seller a chance for additional profit. The buyer profits by getting a home, often for less than market value, in exchange for paying a higher interest rate to the seller.

The original lender has to give permission for a wrap-around mortgage, as there are risks for all parties. The buyer or seller could default, but in the best case, the seller makes more money than they would have in a cash sale and the buyer gets a home they might not otherwise have been able to afford. Everything else about the transaction is normal—the buyer’s down payment pays both the seller’s and buyer’s real estate agents at closing, just like any other home purchase.

Explains Nolo.com, the buyer and seller sign a promissory note containing the terms of the loan and records a mortgage or a deed of trust with the local public records authority. These loans are typically short term—while the monthly payments may still be calculated as if it were a 30-year loan, it will usually be accompanied with a balloon payoff due in three to five years. By this time, the property may have appreciated, or the buyer may be in a better position to refinance with a traditional lender.

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Should You Offer a Wrap around Mortgage to Your Homebuyer
author avatar
Laura Sellers
EXPERT IN AUBURN-OPELIKA, AL REAL ESTATE SERVICES If you are buying or selling property in the Auburn - Opelika, AL area, I will provide you with the service that you need. I work at the #1 real estate company in Auburn's #1 office. Please contact me today!
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Posted in: Uncategorized Tagged: berkshire hathaway homeservices preferred real estate, best auburn realtors, best opelika realtors, homes for sale in auburn, Homes for Sale nea me, Houses for Sale Opelika, luxury homes for sale auburn, move to auburn, relocate to auburn, Should You Offer a Wrap-around Mortgage to Your Homebuyer?

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REALTOR® Laura Sellers, Auburn, AL

334-332-7263 Direct
LauraSellers01@Gmail.com



1810 E Glenn Ave., Suite 100
Auburn, AL 36830



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