Wrap-around-mortgages… - Posted by Paul S. Strauss
Posted by Paul S. Strauss on July 17, 2001 at 12:52:06:
I live in Naperville, IL, and I’m considering selling my townhouse with a wrap-around mortgage and moving to another townhouse that I am purchasing on a lease-option. I’ve done lease options, but I’ve never used a wrap-around mortgage. I’ve got lot’s of problems with it, namely that when I purchased my home two years ago I knew nothing about investing in real estate. I just knew I wanted a home. The upshot is that I have a conventional FHA mortgage. While FHA did allow me to purchase my home with low $ down- It has an occupancy restriction- I have to live here legally. Can I get out of this clause by refinancing and then turn around and put a wrap around mortgage on the place? Is the bank going to balk? I don’t need the equity, so I could easily refinance for what I owe right now leaving about 10% - 20% equity in the property. Can this be viewed as a ‘down payment’ of sorts since I’d only be financing about 85%? Help me out if you can.