Wraparound Mortgage
A new, larger loan that wraps around an existing loan that stays in place, with the borrower paying the new lender who continues paying the old one.
Quick flashcard
What does Wraparound Mortgage mean on the Texas real estate exam?
Answer: A new, larger loan that wraps around an existing loan that stays in place, with the borrower paying the new lender who continues paying the old one.
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Wraparound Mortgage definition
A wraparound mortgage is a new loan that includes, or wraps around, the balance of an existing loan that remains in place. The buyer makes one payment to the seller or new lender, who then continues paying the underlying original loan.
It only works when the existing loan has no enforceable due-on-sale clause that would block the arrangement.
Source basis
Definition checked against the official sources below on .
On the exam
Exam trap
Tested in
Financing & Settlement (7 of 80 National)
From definition to recall
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Try 5 free questionsThis definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.