Virginia Real Estate Exam Practice Question
Jays new loan to purchase a property includes the sellers existing mortgage. What type of loan is this?
Correct Answer: D
Rationale: A wraparound loan allows a new mortgage to encompass an existing one, enabling the buyer to assume the seller’s mortgage while making payments to the seller.
Option A, a blanket loan, typically covers multiple properties, which is not applicable here. Option B, a package loan, combines real estate with personal property, such as furniture, and does not involve existing mortgages. Option C, an unsecured loan, lacks collateral, making it unsuitable for property purchases, especially when an existing mortgage is involved. Thus, only a wraparound loan fits the scenario of incorporating the seller’s mortgage into the new financing.
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