A technique which permits an existing loan to be refinanced at an interest rate between the original loan rate and the currently prevailing market rate.
A form of loan used for additional financing. Provides a much higher return to the second lender while offering the borrower a way to borrow money at less than current rates.
A loan that includes the remaining balance on an underlying first loan. Instead of having separate first and second mortgages, a wraparound loan has both.
A new junior loan encompassing any existing loans. The wraparound loan is responsible for making the payments for the underlying loans.
A secondary financing option in which new money borrowed is blended with money already owed and registered on title to the property. A second mortgage is registered as security for the new money but the old mortgage remains in existence and the rate of interest is a blend of the rate chargeable on the old mortgage and the rate chargeable on the newly borrowed money.