A wrap-around loan allows a homebuyer to purchase a home without having to get a mortgage from an institutional lender, such as a bank or credit union. Instead, the seller of the home acts as the lender, making it easier for the homebuyer to qualify to buy their house. Wrap-around mortgages can help buyers with bad credit and helps sellers who otherwise may have a hard time selling their home to traditionally financed buyers.
A wrap-around mortgage has several benefits, but also carries risks for both buyer and seller.
If you have little or no equity. Johnny will locate a buyer with a down payment and create a wraparound loan.
There are advantages and disadvantages
Advantage is you can stop the foreclosure and rebuilds your credit. Disadvantage is you may not be able to get a loan for another property until your
present loan is paid off.