FinancingCreative_financingEASY
Quinn Brooks still owes money on an existing mortgage but finances Reese Richardson's purchase with a new larger note that wraps around the old debt. What is this financing device called?
Correct Answer
C) Wraparound mortgage
Wraparound mortgage is correct because the facts match a junior financing arrangement in which a new note includes the balance of an existing loan that remains in place. That is the best description of the relationship, right, or legal concept tested here.
Answer Options
A
Land contract (contract for deed)B
Lease optionC
Wraparound mortgageD
Loan assumptionWhy This Is the Correct Answer
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Deep Analysis of This Financing Question
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Background Knowledge for Financing
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Real World Application in Financing
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Related Topics & Key Terms
Key Terms:
creative_financingfinancingwraparoundseller_financing
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