Learn how a wrap mortgage works, why it may protect sellers better than a simple subject-to transaction, and why My Fair Market Offer prefers wraps for many creative purchases.

Wrap Mortgage Video

Bryce Spraggins explains wrap mortgages in plain English.

How a wrap mortgage works
Typical terms we look for
Why we use a third-party servicer
How wraps help protect sellers

Discuss a Wrap Option

Tell us about the property and current mortgage.

Watch The Video

Video Summary

In this video, Bryce Spraggins explains how a wrap mortgage works and why My Fair Market Offer prefers wrap structures when buying creatively instead of using a traditional subject-to transaction.

A wrap mortgage takes the seller’s existing mortgage and creates a new mortgage agreement around it. The existing mortgage still has to be paid as agreed, but the new wrap terms can be negotiated between buyer and seller.

Bryce explains that wrap terms often include a negotiated interest rate, amortization schedule, monthly payment, and balloon payment.

The video also explains why a third-party servicer is important. The buyer pays the servicer, the servicer pays the existing mortgage, and then the servicer sends the seller any remaining difference.

A wrap mortgage can give the seller clearer legal remedies if payments are not made as agreed.

Transcript Highlights

“A wrap mortgage. That’s the way we prefer to take over payments.”

“What a wrap does is it takes your existing mortgage and it wraps a brand new mortgage around it.”

“That new mortgage, we get to define all the terms. We get to define how long it’s for, what interest rate it’s for, and ultimately what the payments are going to be.”

“What we typically like to do is interest between zero and three percent.”

“We also like usually around a 20-year amortization with a 10-year balloon.”

“With our wraps, we also prefer or require a servicer.”

“The servicer is going to be a third-party entity that sends us the bill, we pay them directly, and then they take care of paying your original mortgage and paying you the difference.”

“We also like a wrap because it protects you.”

“If for whatever reason we can’t make the payment or we stop paying, you are the mortgage holder. You are like the bank.”

“You then have a legal instrument to foreclose on us.”

“That’s why we like to do it as a wrap. It protects you a little bit better, it’s a little bit cleaner for us.”

Continue Learning

Learn more about your options before you decide what to do next.

Watch More Videos Inherited & Probate Help Foreclosure Help

Related Creative Finance Pages

Take Over House Payments Wrap Mortgages Subject-To Real Estate Seller Financing

Want to Discuss a Wrap Mortgage Offer?

Send us the property, mortgage balance, payment, and situation.