Finance
In Florida, a 'wraparound mortgage' (all-inclusive trust deed) is one where:
AThe new mortgage literally wraps around the physical property
BA new, larger mortgage encompasses an existing mortgage, with the seller continuing to pay the original lender✓ Correct
CA lender provides 100% financing wrapped in title insurance
DThe interest rate wraps from variable to fixed after 5 years
Explanation
A wraparound mortgage includes (wraps around) an existing first mortgage. The buyer makes payments to the seller on the larger wraparound mortgage, and the seller continues paying the original lender.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Math Concepts
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