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johnr · Joined: 14 Mar 2010 Posts: 1 1.34 Dollars($)

I have a property which I have an existing mortgage on and want to sell to my existing tennants whom credit score is around 600. I want to sell them the property and have a new morgage put on property to WRAP AROUND EXISTING. I am aware that the existing mortgage company may call the loan in if they find out. I am in the State Of New York. I want to be sure that it is not illegal to do this despite my existing mortgage company possible giving me a problem if they find out. Please let me know . Thank you

jameshogg · Posted: Sun Mar 14, 2010 9:09 pm Post subject:

Hi johnr,

As far as I know, the wrap-around mortgage is a type of seller-financing and it should be remembered that only assumable loans are wrappable. Assumable loans are those on which existing borrowers can transfer their loan obligations to eligible house purchasers. However, remember that a wrap around mortgage transaction will violate the due-on-sale clause of the underlying mortgage, if such a clause is present. So, it's better to inform your present lender about such a transaction and then go for it.

Thanks

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Wrap around mortgage