Finance
What is 'wraparound financing' and what risks does it pose in Rhode Island?
AA standard second mortgage
BA seller-financed arrangement where the seller creates a new loan that 'wraps around' the existing mortgage; risk exists if the original loan has a due-on-sale clause that the seller violates✓ Correct
CA government loan program for first-time buyers
DA mortgage with an interest rate that wraps around the prime rate
Explanation
Wraparound financing involves a seller taking payments from the buyer on a new, larger loan while continuing to pay their original mortgage. If the original loan has a due-on-sale clause, the seller's lender can accelerate the original loan upon discovering the sale.
Related Rhode Island Finance Questions
- The Rhode Island Realty Transfer Tax is charged at a rate of:
- What is 'mortgage acceleration' in Rhode Island lending?
- A VA loan benefit allows eligible veterans to purchase a home with:
- Private Mortgage Insurance (PMI) is typically required when the borrower's down payment is:
- The debt-to-income (DTI) ratio used by lenders measures:
- Fannie Mae (FNMA) and Freddie Mac (FHLMC) are:
- What does 'PITI' stand for in a Rhode Island monthly mortgage payment?
- In Rhode Island, foreclosure proceedings are primarily:
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →