Seller Finance
Seller finance is when the seller owns the property free and clear and provides the money or "loan" to the buyer.  The buyer makes payments to the "seller" or bank based on the agreed upon terms.

A Mortgage Wrap or “Wrap around Mortgage” is similar to seller financing but the seller still has a loan on the house. Because of this, the seller creates a new loan that wraps around underlying lien. The new note can be for the exact same terms and conditions as the underlying lien with some exceptions or it can be for a greater price, higher interest rate, longer term.  The seller can add a second note or add a refinancing term. 

The most important things to remember are there is probably a "Due on Sale Clause" on the seller's note, the buyer must pay off the seller at some point and the seller's lien must continue to get paid monthly.

There are many other things to consider when buying a home with seller financing or a mortgage wrap.  Plus there are many ways to structure the deal. For more information about Seller Financing or a Mortgage Wrap to include how to best structure one, call Premiere Team Real Estate at 512-794-9914.