Finance
A wraparound mortgage (all-inclusive trust deed) is a form of seller financing where:
AThe seller pays off the existing mortgage at closing
BThe seller creates a new mortgage that includes the existing mortgage balance, receiving payments from the buyer and continuing to pay the underlying loan✓ Correct
CThe buyer assumes the seller's mortgage with lender approval
DThe lender wraps the purchase price and closing costs into one loan
Explanation
A wraparound mortgage includes the outstanding balance of the existing mortgage plus additional amounts. The buyer pays the seller on the wraparound; the seller pays the underlying lender.
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