A.I.T.D. - otherwise known as a "wrap," "wraparound" or an

All Inclusive Trust Deed

What is it?  It is a mortgage that includes in its balance an underlying mortgage. Rather than having distinct and separate first and second mortgages, a wraparound mortgage includes both.

For example, suppose that there is an existing first mortgage of $100,000 at 6% interest. A second mortgage could be arranged for $50,000 at 10% interest. But instead of getting that second mortgage, the borrower arranges a wraparound for a combined loan amount of $150,000 at 8%.

The first mortgage of $100,000 stays intact. The borrower pays the wraparound lender one payment on the $150,000 wraparound, and the wraparound lender remits the payment on the first mortgage to the first mortgage lender.

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Call Dean at Century 21 in southern California at 949 290-5348 - Pacific Timezone or GMT -8.