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TeachMeFinance.com - explain wraparound mortgage wraparound mortgage -- a financing device that permits an existing loan to be refinanced and new, additional money to be advanced at an interest rate between the rate charged on the old loan and the current market interest rate . The creditor combines or "wraps" the remainder of the old loan with the new loan at the intermediate rate. The borrower makes one payment, to the new lender, who in turn makes the monthly payments to the original lender. The amount of the wraparound mortgage is the total of the outstanding principal of the first mortgage (which remains in effect) and the additional outstanding funds advanced by the wraparound lender. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.