Wraps, explained for the seller you're talking to

By Stephanie Wilson, Lead Transaction Coordinator · Updated October 2, 2026

If an investor has offered to buy your house with a wrap, this page is for you. It's written to explain the arrangement plainly, so you can ask good questions before you sign anything.

The short version

You sell the house. The buyer pays you over time instead of all at once. Your existing mortgage stays in place, and the buyer's payments to you cover that mortgage plus whatever extra you agreed to. The "wrap" is the buyer's new loan to you, wrapped around the loan you already have.

What actually changes on closing day

• The deed transfers. The buyer owns the house.
• Your mortgage stays in your name. The bank isn't told to change anything.
• The buyer signs a promissory note to you and a deed of trust that gives you a lien on the house. If they stop paying, you have the right to take it back.
• A servicing company is set up. The buyer pays the servicer; the servicer pays your mortgage; whatever is left over comes to you.

Why a servicer matters to you

The servicer is the part that protects you. It means you never have to wonder whether the buyer paid and whether your mortgage got paid. You get a statement showing both. Ask who the servicer is and what it costs before you sign.

Questions worth asking

1. What is my total payment, and what date does it start?
2. How long until the buyer pays me off completely? Is there a balloon date?
3. Who is the servicer, and can I see a sample statement?
4. What happens if the buyer is late? How many days, and what's the fee?
5. Who pays the property taxes and insurance, and how do I know they're paid?
6. Who drafts the documents, and can I have them reviewed before closing day?
7. What happens if I want to sell my note later?

What a good investor will do

Put every answer above in writing. Use an attorney to draft the note and deed of trust. Set up the servicer before closing. Give you the documents at least several days before the signing. If the person you're talking to won't do those things, that tells you something.

Where Music City TC fits

We're the transaction coordinator on the buyer's side. Our job is to make sure everything above happens on time and that you know what's coming before it comes. You'll get a written timeline, a contact who answers, and a copy of everything you sign.

This page is general information, not legal or financial advice. You are entitled to have your own attorney review any documents before you sign them.