Mortgage Wrapping
Is wrapping your mortgage acceptable?
Say you have a home at 5% interest, you decide to sell the home and finance it yourself at 7% (owner financed). Your mortgage company requires insurance on the property which you currently have. Your insurance company requires that you live there to keep a homeowners policy on the house, I asked an insurance company if one could keep the current insurance and put the new owners on the policy as co-insured; they said no that the new owners would have to get their own insurance. At that point, the policy would be in the new purchaser's name and need to be sent to the current mortgage company. The mortgage company will see that the mortgage holder is not the primary insured. What are the ramifications if any? And if it is legal how do you handle the insurance issue? In the State of Texas.
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