How can you avoid the due on sale clause of a wrap around mortgage?

If you are providing a wrap around mortgage to a borrower for your home, you may be facing the problem of a due on sale clause in your current mortgage. This means the entire balance of the sum of your current property is due on the sale of the property to the new borrower. To avoid this clause, consider refinancing your current mortgage into a mortgage or home equity loan on your new property. You may also take a personal loan for the amount withstanding on the debt. Each of these options is highly risky, as you will essentially be taking on extra debt upon the sale of your property instead of relieving a portion of your debt burden.