Final answer:
A wraparound mortgage is the kind of mortgage where the buyer's payments of interest and principal are applied to the seller's existing, lower-cost mortgage.
Step-by-step explanation:
In a mortgage where the buyer's payments of interest and principal are applied to the seller's existing, lower-cost mortgage, it is typically a wraparound mortgage. In a wraparound mortgage, the buyer makes payments to the seller, who then uses a portion of those payments to pay their own mortgage. This arrangement allows the buyer to benefit from the lower interest rate of the seller's mortgage.