How To Use The Wrap Around Mortgage To Sell Your House Fast
Wrap around mortgage – is a powerful ” Secret ” owner financing tool the experts don’t want you to know about. Also known as the All Inclusive Mortgage or Trust Deed ! ! !
If you are too young to remember the 1980′s was struck with a serious recession, high unemployment rates and interest rates rose to “ 18 percent & low 20′s “… Ouch ! ! ! Some real estate agents ran for the hills since it became impossible to sell houses at that high interest rate and prospective buyers could not afford to buy a house at those loan shark street rates the banks were offering to 1st time home buyers.
The ” Wraparound Mortgage “ once again has resurfaced once again as it did in the 80′s to help home owners who are constantly thinking ” I Can t sell my house and don’t know what to do ! ” ! The wrap… although very old school ( old fashion ), is still a very powerful creative owner financing tool.
It has always been… ” A Well Kept Insider Club Secret ” and members of this club would not share these creative strategies with anyone. The banks, real estate agents also hated people in this insiders club and also did not want to share these secrets with you either since they would not benefit, yes they would not make money from this if you used this WRAP… to sell your house ! ! !
The Sub Prime Loans market has completely collapsed … it was abused by well known so called reputable banks and wall street financial giants and has caused our economy to collapse because of their greed and corruption. With the end to Liar Loans ( Income Stated Loans ) buyers can not buy a home or get a home loan easily any more, they must have superb credit ratings in the high 700 plus, and who the heck is carrying around or has a 20% down payment in the bank laying around.
Review the examples below to get an idea of the problem buyers will have, keep in mind that for those home owners in the mid west seeking a descent neighborhood the average price is higher ! Also remember that there are people with credit issues who wish to buy houses and can not due to their credit at this moment.
New York 2 family average price - $600,000 = $120,000 ( 20 percent down payment )
Mid West 1 4 bd rm family average price – $150,000 = $30,000 ( 20 percent down payment )
Attention: With the above examples illustrated — how many prospective home buyers do you think carry around this kind of money or have it in the bank to drop $120k or $30k as a down payment on a house.
What The Heck Is A Wrap Around Mortgage
To keep it simple – it is a second mortgage, a house loan you would give to a prospective buyer for your property that ” wraps around ” your existing mortgage on your house. The home buyer now only makes one loan payment to the home seller, since now the home owner has become the lender and the home seller keeps making their regular home loan payments to their lender.
The difference between what you owe on your existing mortgage as the seller and actual sale price ( minus any money put down as a down payment ) is referred to as real debt !!! The homowner whom sold the home is now the wraparound note ” holder ” and the property buyer is now the wraparound note ” maker “.
The home seller now has a lien which now secures payment of the wrap around note from the buyer which now also becomes ” secondary or subordinate ” to the original mortgage still in possession of the home seller.
Sub prime loans are a thing of the past due to the corruption and greed from financial institutions, packaging loans to sell to the secondary market knowing they were bad loans to begin with.
However, ” you have just found a Solution and Replacement for the buyer that fits your criteria but cannot get a home loan through a traditional lender “, you now can essentially provide an alternative loan for the sub prime loan market that has been completely eliminated for buyers with bad credit but have the money to buy and work history to support a home loan.
When Should A Home Seller Use A Wraparound Mortgage
Due to the mortgage meltdown crisis, upside down mortgages, foreclosures crisis, corruption and greed from the financial institutions you the home owner trying to sell your house has become a nightmare to sell your home.
Home Seller – If you are a home seller owner, can’t sell your house and simply just ran out of time and must sell your house, then you should research & speak to a knowlegeable person on wraparound mortgages.
Home Seller – If you are in a distressed situation like facing divorce, house vacant, relocating, foreclosure, property liens, probate, tired of being a landlord, a for sale by home owner, have a listing with a realtor that is expiring then you should once again consider this seller financing tool.
” Home owners facing foreclosure especially ” … who are thinking at night silently ” should I short sale my house ” should review this owner financing strategy. A short sale can take a very long time to get done and may get you into trouble if things do not go as planned with your buyer. The bank has to approve the short sale, you have to find a buyer, the buyer has to qualify, buyer can change his mind to buy, etcccc
Can Buyers With Bad Credit Get A ” Wrap Mortgage “ To Buy A House
Not all house buyers lack the money, don’t have a good job to buy house. If you are a house buyer who has the down payment to buy a house, but you have a bad credit rating due to some unfortunate circumstances, have looked into sub prime home loans but can’t find any, and been getting denied for a home loan at every bank you go and apply – you have just found a Solution !!!
Yes… ! You too can now buy a home regardless of your credit history, the wrap around mortgage can help you get into your dream house and not have to wait for years to buy a home ! ! !
6 Wrap Around — Seller Advantages
* You’ll sell your house very fast
* No appraisal needed by bank – you are the bank
* You can get your asking price since housing prices are being devalued in all states
* Origination, appraisal, title insurance, junk fees totally eliminated to your buyer
* You can ask for a higher higher down payment from the buyer
* Buyer does not have to have a 700 – 800 credit score the banks are asking
5 Wrap Around — Buyer Advantages
* You can buy a house regardless of credit history
* No long applications or long approval process
* No credit approval process
* You can buy very fast & easily then with other options available
* Save on fees from a bank and give seller a larger down payment
2 Wrap Around – Seller Disadvantages
1) Due On Sale Clause
The “due on sale clause” is a added to a mortgage document that allows the lender to demand total payment of the loan balance when your house is sold. It is not a law enforced by city, state or federal but more of a contractual right !!! Which means if your house is sold your lender may or may not ask you to pay the balance on the loan.
If you’re “ facing foreclosure ” and the bank wants your house back, they rather not have a non performing loan on their books – they much rather have a performing loan and receiving monthly payments as long as they are steadily receiving them. In other words it does not make sense for the bank them to activate the “ due on sale clause ” and get stuck with a dead property will will only cost more to keep and lose a steady monthly payment to them if they were to do this.
You see – different house selling options have an upside or downside to them. Dependent on your individual situation, you will have to weigh out the pros and cons of your other options and compare the pros and cons against the wraparound mortgage.
ATTENTION – FHA-insured mortgages originated before Dec. 1989 and VA-guaranteed loans originated before Feb. 1988 do not contain the “due on sale” clause.
2) No One Lump Sum From House Sale
You won’t receive one lump sum of money from the sale of your house, but if you can’t sell your house and you must sell then what other options do you have and what complications are you facing if you do not sell your house within a certain period of time.
If you found this creative financing tool interesting, known as the wrap around mortgage you may want to do more research on the other 7 types of seller financing strategies available. a little more