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Creative Real Estate Financing

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Christopher Cole
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Creative Financing in texas

Christopher Cole
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Posted Dec 29 2022, 02:34

Can someone explain the difference in wraparound mortgage and subject to the mortgage to me and is one a better tool. Also is there a special guideline in Texas to do a wraparound mortgage thanks guys

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Chris Seveney
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Chris Seveney
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Replied Dec 29 2022, 05:25

@Christopher Cole

Subject to is when you buy it subject to existing mortgage - a wrap is the second half a subject to where you then turn around and sell it to someone else and put a second mortgage on the property where the new borrower is paying you as well

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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Replied Dec 29 2022, 06:40

A wrap is if you owner finance a property that has a loan on it. Subto is when you take over the sellers loan payments  

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Christopher Cole
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Christopher Cole
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Replied Dec 29 2022, 07:49
Quote from @Eliott Elias:

A wrap is if you owner finance a property that has a loan on it. Subto is when you take over the sellers loan payments  

Thanks sir 

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Christopher Cole
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Christopher Cole
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Replied Dec 29 2022, 11:56

Thanks so much for the information one last question is there a Appraisal done when doing a wraparound mortgage and if so does the buyer pay for it

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Brad S.
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Brad S.
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Replied Dec 29 2022, 13:41
Quote from @Christopher Cole:

Thanks so much for the information one last question is there a Appraisal done when doing a wraparound mortgage and if so does the buyer pay for it

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An Appraisal is not required in a wrap, since there is no traditional Lender involved. But, it may be desired. In a wrap, the Homeowner/Seller is the Lender and they may want an Appraisal for their own satisfaction, but it is not necessary.

And for the Buyer/Investor, no Appraisal is necessary. And, the investor should be experienced enough to know the value to them, regardless of an appraisal.