All-Inclusive Trust Deed (AITD)

Definition of "All-Inclusive Trust Deed (AITD)"

Adam Wheeler real estate agent

Written by

Adam Wheelerelite badge icon

Howard Hanna - West Suburban

Many homebuyers or real estate investors only think of mortgages when it comes to financial aid in real estate purchasing. Lately, with the increasing desire of homebuyers to not be immobilized financially by a bank or a loan, alternative financing options have started surfacing. Some of these alternatives are types of seller financing, and the all-inclusive trust deed (AITD) is one of them. Through an all-inclusive trust deed, the buyer can deal directly with the seller, which is beneficial, especially for the buyer. They no longer have to qualify for a typical mortgage loan or take a much smaller mortgage for the property.

So what is an All-inclusive Trust Deed?

An all-inclusive trust deed or a wraparound mortgage is used by homebuyers when purchasing a property that is still under an existing mortgage. An all-inclusive trust deed definition is a document that is secured by a promissory note between the seller and the buyer that takes the remaining balance from the existing seller’s mortgage into account and adds to it the difference between that balance and the sale price of the property. Another way to define an all-inclusive trust deed is as secondary or alternative financing for purchasing real estate.

An all-inclusive trust deed, as any other trust deed by definition, allows the lender to take backpossession of the property if the buyer defaults on their mortgage. Because of the wrapping aspect of all-inclusive trust deeds, if the buyer defaults on their mortgage, the original lender will be the one foreclosing the property.


Need help as a:

I'm interested to:


I work in:

Reach out to the local professionals for help
I agree to receive FREE real estate advice.

Agents, get listed in your area. Sign up Now!

Here's what you'll get:

1. Full zipcodes coverage for the city of your choice for 3 months

2. The ability to reach a wider audience

3. No annual contract and no hidden fees

4. Live customer support/No robo calls

$75 - Any City - 3 Months Coverage
loader gif

Please wait ...

I agree to receive FREE real estate advice
I agree with Terms & Conditions and Section 5-5.9.

How does an All-inclusive Trust Deed work?

There are specific situations in which an all-inclusive trust deed is used for a home purchase. Maybe the buyer can’t access a loan to cover the full price for the purchase, or the original mortgage’s interest rate is too attractive to give up on. Whichever is the reason, an all-inclusive trust deed can make it easier for homebuyers to purchase homes.

Through an all-inclusive trust deed, the seller can be the financing partner for the buyer. By extending a junior mortgage towards the buyer, the seller keeps their existing mortgage at the original interest rate, which might be better than what a new mortgage would require from the buyer. This junior mortgage doesn’t stop the original mortgage, but they work together. The all-inclusive trust deed wraps both the original and the junior mortgage into one payment that the buyer must pay the seller. The seller continues their payments to their existing mortgage and keeps the surplus.

Example of an All-inclusive Trust Deed

  • With a small balance remaining

Seller Sam wants to sell his home to John with $80,000 left on his mortgage with an interest rate of 5%. As the house is selling for $300,000 and John can’t take out such a significant loan, they make an all-inclusive trust deed. Like this, John will take out a loan for the difference between $300,000 and $80,000, which is something he can access. Through his mortgage, John pays a 7% interest rateand a monthly fee of around $650. To this, John adds Sam’s remaining mortgage fee of about $230. John’s all-inclusive trust deed will add the two fees into one of $880.

  • With a big balance remaining

Seller Sam needs to sell his home with $175,000 left on his mortgage with an interest rate of 6% and a monthly cost of $1,100. The selling price Sam and John agreed on is $250,000. The difference between Sam’s balance and John’s purchase price is $75,000, and John can’t pay off the original mortgage. John can take over the original mortgage payment and pay the difference as a second seller-financed mortgage at Sam’s interest rate. Sam agrees and will carry back the second mortgage at an 8% interest rate. The second mortgage of $550 will wrap around the first mortgage, and John will pay Sam a monthly fee of $1,600.

Comments for All-Inclusive Trust Deed (AITD)

Richard Richard said:

Are AITD's used in Maine?

Nov 17, 2022  10:11:50

Real Estate Agent

Hello Richard! Thank you for reaching out to us. All-Inclusive Trust Deed terms and conditions may vary from state to state and by various lending institutions. Nonetheless, as we're informed, Maine allows deeds of trust. Still, we recommend contacting a real estate attorney in Maine. Or, you can consult the Official Land Records Website of the Maine Registers of Deeds Association.

Nov 22, 2022  11:34:46
Gilbert Tobias Gilbert Tobias said:

I need information on AITD for California

Oct 29, 2018  19:00:28

Real Estate Agent

Hey, Gilbert!
AITD is legal in California. But somewhat risky. If you're interested in it, we suggest contacting one of our California Real Estate Agents so they can weigh in with their professional opinion!

Oct 30, 2018  15:22:31
image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.


Popular Real Estate Terms

The largest financial intermediaries directly involved in the financing of real estate. Commercial banks act as lenders for a multitude of loans. While they occasionally provide financing ...

Method used by appraisers and investors to evaluate a level of payment income stream for a fixed period of years predicated on a specific interest rate. ...

An investigation to ascertain who legally has the title to property. For example, when a house is sold, the attorney for the purchase will do a title search to guarantee that the seller ...

Unsecured long-term debt. There is no collateral or lien on the property. A debenture can only be issued by a financially sound borrower with an excellent credit rating because no ...

Freestanding residential housing constructed on its own building lot. Detached housing is the typical type of housing found in suburban developments. ...

Transfer of property from a seller to a buyer. ...

Corporation whose stockholders are taxed as partners. That is, income is taxed as direct income to the shareholders. The key advantage of this tax treatment is that shareholders escape ...

A will where the decedent's nomination of an executor/executrix is flawed, requiring an administrator to be appointed by the court and annexed to the will. ...

Written obligation of a borrower that is backed by collateral in the event of default. The lender must assure himself that the market value of the security equals or exceeds the amount of ...

Popular Real Estate Questions