Business A to Z

Wraparound


A financing device that permits an existing loan to be refinanced and new 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. Often used to avoid a prepayment penalty or a due on sale clause. Can refer to a wraparound deed of trust or contract for deed.


Personal Finance Headlines

© 2005 The Washington Post Company