What type of mortgage includes existing loans on the property?

A wraparound mortgage is a type of financing that includes existing loans on the property, allowing the borrower to acquire new financing while keeping the original loan in place. In this arrangement, the lender of the wraparound mortgage effectively "wraps around" the existing mortgage, creating a new loan that encompasses the outstanding balance of the original loan plus any additional funds needed by the borrower.

This type of financing can be beneficial in situations where a borrower may have a favorable interest rate on their existing mortgage or when qualifying for a new loan might be challenging due to credit issues or other circumstances. The wraparound structure allows homeowners to bypass the need for a payoff of the original mortgage and can streamline financing in certain market conditions.

In contrast, the other types of mortgages listed—conventional, fixed rate, and graduated—do not inherently involve existing loans on the property. A conventional mortgage refers to a loan not backed by a government agency and does not necessarily encompass existing loans. Fixed-rate mortgages have consistent interest rates over the life of the loan, and graduated mortgages feature payment structures that increase over time but also do not include existing loans.