Finance
A wraparound mortgage is one where:
AThe new loan pays off the existing mortgage
BThe new loan encompasses the existing mortgage balance plus additional funds✓ Correct
CThe loan is insured by the federal government
DThe interest rate adjusts based on the prime rate
Explanation
A wraparound mortgage is a form of seller financing where a new (larger) loan includes the outstanding balance of an existing mortgage. The seller continues paying the original loan while the buyer makes payments to the seller on the wrap.
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