Rental Property Investor · Atlanta, GA · Member since 2015 · 31 posts · 44 votes
Subject-to means subject to the existing loan. This means having the home owner sign the deed of the house over to you, with the promise that you will make their mortgage payment. However, the lender is not made aware of this change. This allows us to retain their low interest rate.
I've heard horror stories about subject to. For example, the original owner may come calling to wipe out their house debt when their debt:income sucks and threatening to make lender aware of changes to claim the due on sale clause. Is there a safer way to buy and home and assume the original mortgage terms?
Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
3y
I’m not sure based on that parameter of assuming the loan, but IMO if the goal is to acquire with low and no money down, seller finance of free and clear property really can accomplish the same goal. I’ve been making offers with both strategies , haven’t yet been accepted or closed but I find that many are willing to do sub2 but it’s not as clean as an owner carry, as the lender automatically is a 3rd party but OC obviously is just a 2 party deal.