A seller still owes $145,000 on an existing mortgage and agrees to create a wraparound note that includes that old balance plus $50,000 of additional seller financing. What is the total wraparound note amount?
Correct Answer
D) $195,000
A wraparound note is written for the existing balance the seller keeps paying plus the new money the seller is carrying: $145,000 + $50,000 = $195,000. The buyer pays the seller on the $195,000 note, and the seller continues to pay the underlying $145,000 loan out of what it receives.
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Related Concepts
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
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