Subject To Existing Mortgage

The seller finance  method of ‘subject to’ buying or selling a house has become an increasingly popular option in today’s real estate market. For an increasing number of people today, selling “subject to” is their only option.

Lots of people just don’t have the time that it takes to place a house on the market, organize an open house, interview potential buyers, and sort through several competing offers in order to find the most cost-effective option. Many owners are looking to sell the house quickly or some might even owe more than the house is worth.

Well, Whats A Good Options For This Group of Sellers

The ‘Subject to’ method of selling a house can be the answer for a lot of homeowners who are strapped for time and even more strapped for cash. As a homeowner, you’re already going to be making monthly mortgage payments. As part of the ‘Subject to’ method of real estate, your buyer will agree to take on those payments, right where you left off. It’s passing the torch to a new family, all while reducing your involvement in maintenance of the property and the expenses of owning it.

When to Use the ‘Subject To’ Method

However, homeowners who are running out of time or owe more than the house is worth should consider pursuing the ‘Subject to’ method. 

The seller finance ‘Subject to’ method allows people to get around many of the obstacles in their way, so it’s understandable that people would be suspicious of it. However, the “Subject to” method is perfectly legal. Real estate agents and experts will actively recommend the ‘Subject to’ method to clients who are in situations where they have very little time to act and much to lose. In every sale of a home in the United State there is a HUD form each party has to sign. This is where the transaction is laid out in detail by the closing attorney. There’s actually a line for Subject to, on this document – Line 203 – Existing loans taken subject to.

The ‘Subject to’ method differs from owner financing. In owner financing, it is literally the owner who finances the property instead of the bank. Owner financing is a good option for owners who do own the property but who do not pay mortgages. If both parties have more equity and large loans to deal with, owner financing might also be a better option. However, in cases where the owner doesn’t have a lot of equity, the ‘Subject to’ method is still going to be better.

Why Buyers Choose the ‘Subject to’ Method

For the most part, the ‘Subject to’ method tends to get discussed in terms of how it is going to benefit the seller. Indeed, the seller is the person who is instigating the transaction while the buyer reacts, so it makes sense to see it that way. However, the ‘Subject to’ method does have plenty of clear benefits for the buyer as well.

With the ‘Subject to’ method, it’s like someone just handed them a house with the mortgage payments already in place. The buyer can pay the property off gradually in the manner of all other seasoned homeowners. When you use the ‘Subject to’ method, you’re giving the buyer a shortcut on the road to becoming an experienced and settled homeowner.

The process of buying a home is nearly as stressful as the process of selling a home. When the ‘Subject to’ method works out for both parties, buyers are just able to quickly get the homes that they’ve always wanted. Still, the partnership between the buyer and seller isn’t over when the ‘Subject to’ method is complete. If buyers don’t make the payments, the proceedings for the foreclosure might finally begin. Both parties can be affected in that situation. When working with an investment firm like us, we can help you move fast in the sale of your home through many avenues. You will avoid credit damage and foreclosure, easily and simply.

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