quote:Originally posted by rmbbrave

What does WRAP stand for?
The term "wrap" is an anomalie. It refers to a mortgage "wrapped" around an existing mortgage, but in reality there is only one actual mortgage that is held by the original purchaser's bank.
Simply it is vendor finance.
I buy a house and borrow the money from the bank at say 7%. I then sell the house to you and finance you at say 10%. The contract is based on immediate possession, delayed settlement(like 20 years)paid in installments, pretty much like a hire purchase agreement. The contract uses a standard law society agreement form with added special conditions (the tricky bit), is legal and binding. Title is not transferred until final installment is paid which can be at any time.**
Hope this helps
Cheers
JK
edit** the average length of a mortgage in NZ is about 7 years.
My WRAP deals are designed so that the buyer can qualify for a bank loan within 3 years.