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How Does It Work?

Here's a simplified breakdown of how a wrap transaction operates:

1.   The buyer purchases the property subject to the existing mortgage, assuming responsibility for making the mortgage payments to the lender.

2.   Simultaneously, the buyer and seller enter into a separate agreement where the buyer agrees to make payments to the seller, effectively creating a new mortgage or promissory note.

3.   The seller retains the original mortgage but acts as the lender to the buyer for the additional financing provided.

Benefits of a Wrap Transaction for Homeowners

1.    Flexible Financing Options:: As a homeowner, a wrap transaction offers you flexible financing options tailored to your specific needs and preferences. You have the freedom to negotiate terms such as the purchase price, interest rate, and repayment schedule to suit your financial situation.

2.    Streamlined Sales Process: A wrap transaction can streamline the sales process, making it quicker and more efficient compared to traditional real estate transactions. Since buyers bypass the lengthy mortgage approval process, transactions can be completed more expeditiously, allowing you to move on to your next chapter sooner.

3.    Continued Income Stream: With a wrap transaction, you continue to receive a steady income stream in the form of monthly payments from the buyer. This provides financial stability and allows you to supplement your income even after selling your property.

4.    Maximize Profit Potential: A wrap transaction can potentially allow you to sell your home at a higher price and maximize your profit potential. By offering flexible financing options, you may attract buyers willing to pay a premium for the convenience and flexibility offered by a wrap transaction.

5. Tax Benefits: There are several tax benefits that can be taken advantage of when selling your home with seller financing.  Consult with your accountant to discuss your strategy.  You can end up saving thousands in capital gains with seller financing.

In conclusion, a wrap transaction combining Subject To (SubTo) and seller financing offers numerous benefits to homeowners looking to sell their properties. It provides flexible financing options, streamlines the sales process, ensures a continued income stream, and maximizes profit potential. If you're considering selling your home, a wrap transaction could be the ideal solution for you.

For more information or to explore how a wrap transaction can benefit you, please contact us today. We're here to help you navigate the real estate market and achieve your goals.

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