What is Wrap Around Mortgage?

Wrap around mortgage is similar to second mortgage but there are some differences. The wrap around mortgage is taken after an initial one, the new lender makes the payments on the old or the initial mortgage. The one who's holding the mortgage under the wrap around mortgage gets his money through the face value and then pays off the first mortgage. To get the most out of this deal then the first mortgage has to have a lower interest rate then the second one. The mortgagee or even the mortgagor under this deal may get a lower rate then refinancing.