Most people think that a home loan agreement is a standard printed form with a few blanks to be filled for amounts, interest rate, and number of payments. This needn't be true.

Sure, the basic transaction is simple. When you borrow money, you sign a note, which is proof of your debt. Then as security, to be forfeited if you don't pay, you  sign an agreement giving the lender the right to force the sale of the property to recover the amount owed him. A mortgage or a trust deed is the agreement showing  that your property is the collateral for your note.

In reading this book you've become aware that the terms of a real estate loan may vary from one lending institution to another or that it may vary in the same  institution from month to month, depending on the state of the money market. But maybe you think this is the extent of the possible variations.

Even some people who've done a lot of business in real estate think this way. "A mortgage is a mortgage," they say. "A trust deed is a trust deed. These documents are always the same fundamentally."

The average lending officer at a bank isn't likely to suggest any such agreements to you--mainly because they're a bit hard to explain. But he'll usually go along if you ask for one of them and if he sees that you and your real estate broker under- stand them too. They're well worth understanding. All-inclusive trust deed or mortgage, also sometimes referred to as a wraparound or overriding trust deed or mortgage. This is a trust deed or mortgage that is subordinate to, yet includes, all the encumbrances to which it is subordinated. It is a junior deed of trust or mortgage that includes the unpaid balance of all existing trust deeds senior to it, in addition to a possible further encumbrance on the property. It is generally used in connection with a sale, but sometimes in connection with a refinancing.

It is easier to illustrate than to explain. A few years ago I knew an owner who wanted to sell a property on which he was paying off a twenty-five-year loan. The unpaid balance was $30,000. He was paying 6 percent interest. He found a would-be buyer, and the two of them agreed on a price of $60,000, with the buyer to put up $10,000 in cash, leaving $50,000 to be financed somehow.

One possibility was for the buyer to try to refinance the $30,000 first mortgage with a new, larger loan. However, the money mar- ket was tight at the time. Any new loan he might get probably would not be for more than $42,000 and would cost him I0 per- cent interest plus at least two points. In addition, there would be a repayment fee on the existing loan equal to six months' un- earned interest, or another $900.

A second possibility. The buyer might assume the $30,000 existing loan and have the seller carry back a purchase-money second trust deed or mortgage for the remaining $20,000 of the sales price. The interest rate could be whatever the buyer and seller agreed on up to the maximum legal rate, which in their state was at the time I0 percent.

A third possibility (and the one they finally decided on) was to use an all-inclusive deed of trust. The buyer gave the seller a promissory note in the amount of $50,000 with interest at 81/2 percent. The note contained a clause to the effect that its face amount included the unpaid balance of the first mortgage, and that the seller would still be responsible for making payments on that underlying obligation as it stood.

So the seller was in the comfortable position of receiving interest at an annual rate of $4,250 (81A% of $50,000) while paying out interest at an annual rate of $1,800 (6% of $30,000), thereby netting $2,450, or 12.25 percent, on the $20,000 difference between the two notes. This is 2.25 percentage points higher than he could legally have charged if he had carried back a $20,000 purchase money second. The arrangement put an extra $450 per year into his pocket.

The buyer made more money too. He avoided completely the $900 prepayment penalty and some $I,000 in loan-origination costs he would have incurred if he had taken out the new 10 percent $42,000 first mortgage. Furthermore, he ended up paying 11/2 percentage points ($750) less annual interest than he would have paid on a new first and second totaling $50,000.

Unfortunately, the option to use an all-inclusive note is limited to cases where there is no acceleration or other alienation clause in any of the notes or mortgages against the property, or, if there is such a clause, the lender agrees to waive it. He will seldom waive it unless he has little to lose by doing so. In that case the borrower may also have little to gain from the lender's willingness to allow the loan to stand intact. When to use an all-inclusive mortgage. Where there is no clause in the existing loans that blocks them, all-inclusive loans can be good to use when:

1. There is a locked-in loan that cannot be paid off--at least without severe penalties.
2. The buyer is a poor risk and is making a small down payment.
3. A property is overpriced and the seller sticks to the price but not to the terms of sale.
4. The existing loans are at lower interest rates than you could get on new financing.
5. There is little time to shop for new loans and little chance of the buyer's qualifying for them.
6. The down payment offered is so low that the only practical alternative would be for the seller to carry back a large purchase-money mortgage.

But what about the owner who sells property to you under such an arrangement? Why should he go for the transaction? What's in it for him?

Mainly the extra cash he'll be collecting from you each month. But it also gives him a way to refinance his existing mortgage without touching it--and to sell to you  even though you haven't enough cash to cover his equity.

If a tough prepayment penalty clause would make it prohibitively costly for him to pay off his original mortgage, the wraparound mortgage is a means of avoiding this.

Then, too, if he should have to repossess the property from you, he's no worse off than before; his original financing is still good, so he doesn't have to negotiate another mortgage, which would probably be less favorable.

As for you, the buyer, this is a beautiful way to make your cash go further in expanding your real estate holdings. Your down payment will swing a much bigger buy than it could otherwise. In a time of high interest rates, if you wanted to get a new loan to make this same buy, you probably couldn't get it, because lending  institutions would require a bigger down payment or stiffer installment terms than you could afford. Most lending institutions can't legally advance funds on a second mortgage or contract of sale. But with the wraparound financing they are within the law. And they feel safe, since the original mortgage still covers the property, and the seller is still responsible for making the same payments. If you as buyer should fail to keep up payments on this new all-inclusive mortgage (which is a junior loan, remember, even though it's bigger), that's the seller's problem, not the bank's. The bank as mortgager still has prior claim on the property in case of default.

You also get other benefits by buying property with this all- inclusive mortgage or trust deed. It saves you the time of shopping around for loans, filling out applications, haggling with lending officers. And it saves you money you'd probably have to pay out for escrow charges, "points" to the bank for originating or transferring the loan, and so on.

I strongly urge that you get a real estate attorney's help when preparing all-inclusive deeds of trust and contracts providing for their use.