Can You Sell A Wraparound Or Wrap Mortgage Note?
4:19 watch · September 22, 2026 · With Dawn Bearden, Moxxie Asset Group
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What You’ll Learn About Selling a Wraparound Note
- ✓ How a wrap note works — The seller creates a new, larger note that wraps around their existing mortgage and keeps the difference between the two payments.
- ✓ Yes, it’s sellable — Wraparound notes can be sold, just like a standard seller financed mortgage note.
- ✓ Two loans to verify — A note buyer reviews your note’s terms plus the underlying loan’s balance, payment status, and terms.
- ✓ The due-on-sale question — Most conventional mortgages have a due-on-sale clause, and a note buyer will want clarity on it.
- ✓ Underlying lien paid first — The purchase price must pay off the underlying mortgage first so the buyer can move into first position; you keep what’s left.
- ✓ Free, no-obligation review — We’ll walk you through both layers — your note and the underlying lien — and tell you clearly whether we can buy it.
Prefer to read? Can I Sell a Wraparound Mortgage Note? — The Full Guide
Full Video Transcript
Introduction
Hi. I’m Dawn, the Senior Note Analyst and Seller Financing Advisor with Moxxie Asset Group.
Today, I want to answer a question that doesn’t come up as often as some others, but when it does, people are usually pretty confused about it. The question is, can you sell a wraparound or a wrap mortgage note?
What Is a Wraparound Mortgage Note?
Well, first, let’s make sure we’re on the same page of what a wraparound or a wrap mortgage note actually is. Say a seller still owes money on their existing mortgage of their property. Instead of paying that mortgage off at closing with their home buyer, they create a new, larger mortgage with that that wraps around the existing underlying mortgage loan.
The home buyer makes one payment to the seller/new note holder, and the seller/new note holder uses part of that payment to keep paying their original underlying mortgage, then they keep the difference or the overage for themselves.
Similar to a Landlord and a Renter
This payment structure is very, very similar to how a landlord would have a mortgage on a property and rent that property out to a renter. That rent payment would come in to the landlord and help them pay off the underlying mortgage, and the landlord would keep any money left over as profit.
Yes, Wraparound Notes Are Sellable
So, can you sell a note like that? Well, yes, you can. Wraparound notes are absolutely sellable, just like a standard seller-financed mortgage note.
But, there’s a real wrinkle that makes some a little more complicated, and it’s worth understanding before you try it.
Two Loans to Review Instead of One
Because there is an underlying mortgage lien still sitting underneath the note, a note buyer who’s looking to buy the note has to look at two things instead of one. Your note’s terms and the terms of the status of the original underlying loan.
If that underlying loan has a due-on-sale clause, and most conventional mortgages do, that’s something a note buyer will want clarity on since it affects the risk of the whole note sale structure.
Why Wrap Notes Take More Due Diligence
This added layer of complexity is exactly why wrap-around notes often take more due diligence and sometimes sell at a bigger discount than a straightforward first position note.
It’s not that wrap notes are bad. It’s that there’s simply more for a note buyer to verify. They have to buy verify the note you’re selling, the underlying loan balance, and its payment status, and its terms before they can price out your note with confidence.
The Underlying Lien Gets Paid Off First
Also, when Moxxie buys a wrap-around or a wrap mortgage, and most other note buyers probably have this same rule, the money that is offered to purchase your note must pay off the underlying mortgage lien first. Then any money that’s left over is that is something that you would keep as the note seller.
This is because when we buy a note, we must move into first note holder position on that property. If our offer is not high enough to pay off that underlying lien, then we will let you know that we’re unable to buy that note from you.
Get a Free Note Review
If you are holding a wrap-around mortgage note, and you’re not sure what it’s actually worth, that’s exactly the kind of situation our free no-obligation review is built for.
We have a free note review form on our website for you to fill out. We will get back to you in a few days and walk you through both layers of your note that you want to sell together and your underlying lien and give you a clear picture if we can buy this note from you and all the steps that are needed. If you you can also reach out to us anytime by calling 954-466-7111 if you have any questions about your individual situation. Thank you.
Want to Know What Your Note Is Actually Worth?
Wondering, “Should I sell my mortgage note?” We buy mortgage notes nationwide, and you can sell mortgage note payments in full or in part. Send us your note details and our team will walk you through the numbers — no obligation, no pressure. When all documents are received and title is clear, most closings run 3–5 weeks. Have your promissory note and your mortgage or deed of trust (depending on your state) handy.
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