Posted by Ray Richardson on December 09, 1998 at 09:56:24:
What references would you suggest to learn more about wraps? In fact, I’d like suggestions for good refs on creative RE financing in general.
-Ray
Wraparound or Assume first,create second? - Posted by Nate
Posted by Nate on December 09, 1998 at 02:00:22:
Is there a better way to go if I have the choice of either taking a wraparound mortgage at $159,000 vs. assuming a first of 141,000 and taking a new 2nd for 18,000?
The only difference I see is that you’re making 2 payments instead of one???
Re: Wraparound or Assume first,create second? - Posted by CX
Posted by CX on December 09, 1998 at 19:41:15:
When you give the seller a wrap, it is possible to avoid the cost and liability of assuming the first mtg.
If you have difficulty obtaining a mtg based on your credit or you need an incentive to entice the seller to take the wrap, you can offer the wrap at an interest rate greater than that of the first mtg. (premium).
If the seller desires an income stream over ‘cash now’
his yield is greatly increased when the first mtg has less pymnts remaining compared to the number of pymnts
required to satisfy the wrap.
It seems as though the existing Mtg of 141k is relatively new so a wrap might work out well for you.
At any rate, you have to examine your needs and desires as well as that of the sellers so that you can structure a deal that makes mathematical sense and is acceptable to you both.
I hope this helps.
I am a newbie so if there is anyone who can offer futher comments and/or corrections please do so.
I also have a question:
How can the buyer further protect his/her interest in the property when the seller accepts a wrap?
Re: Wraparound or Assume first,create second? - Posted by Anywho
Posted by Anywho on December 09, 1998 at 02:18:52:
Because the payment on the first, pays down the “principle” faster than you would paying on one NEW mortgage, thus gaining more equity. READ up on it…I did, and am now trying to implement the “wrap” concept into a deal.
Re: Wraparound or Assume first,create second? - Posted by Nate
Posted by Nate on December 09, 1998 at 15:23:36:
I don’t quite understand your response:
it sounds like you start out saying that assuming the first would be better, and then you end by saying you are now trying to do a wraparound…can you explain a little better? Thanks…