“SUBJECT TO” What??
Posted by: Michelle Odessey, in Single-Family Properties, Multi-Family Properties, General“Subject To” is a term used when ‘buying’ a property, subject to the existing financing. Which means you don’t have to get new financing, or private money, or even hard money.
The transaction part can usually be done for as little as $10.00.
Which means you are ‘buying’ the house subject to the existing mortgage(s) that the homeowner currently has on the property. You are taking over the existing
financing and making those payments.Now at this point I am sure you have at least 20 - 30 questions that you are asking, so why don’t we begin with the obvious ones.The first question you have is about ‘assuming the loan’. This does not mean you are assuming the loan and, this does not mean that your name is now on the mortgage nor does it mean that your credit report now reflects this debt.
It means that the seller has deeded you the house and, in good faith, has walked away giving you the property and leaving you in charge of his/her property and the payment of the debt.
The second question you have is - “why would any homeowner in their right mind do something like that?”
Great Question! Here are just some of the answers. (1) an new job, (2) a new house, (3) a divorce, (4) a death, (5) a marriage, (6) a family member that needs extra care . . . . I could go on and on because I have seen/heard tons of reasons.
In fact in some situations, subject-to can be used when working on a pre-foreclosure property. (More on this one later.)
Let us know your questions or comments below.
Peggy Parks and Michelle Odessey
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October 9th, 2007 at 9:53 pm
I know it is possible to acquire property subject to. . . As the Foreclosure rates are rising in our country, there will be even more opportunities to “get the deed” to the property, since the homeowner just wants out and to save his credit. I had a neighbor just walk away from his property recently never looking back. He was over 60. . .had just purchased a home 5 years ago, and was not really concerned about ruining his credit. I missed an opportunity here to take it over “subject to.” Hope you don’t miss that opportunity when it arises.
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December 23rd, 2008 at 11:04 am
I would like to learn all about how to purchaser single,multifamily, and commerical properties. Please help me with this. Thank you Dennis