Finance

In Kansas, what is an 'all-inclusive trust deed' (AITD) or 'wraparound mortgage'?

AA mortgage that covers all improvements and land in one loan

BA junior mortgage that includes (wraps around) the existing first mortgage, with the second lender collecting one payment and forwarding the first mortgage payment✓ Correct

CAn FHA loan that includes all closing costs

DA commercial loan that secures multiple properties

Explanation

A wraparound (AITD) is a seller-financing arrangement where the seller creates a new, larger loan that includes the existing first mortgage. The buyer pays the seller one payment; the seller continues paying the original lender.

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Key Terms to Know

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

Discount Points

Prepaid 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 Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).