Sub2 Refi Question

[Jason James]

Hello all. I am new to the forum but not new to the game. That said I have tons and tons to learn. I would like to hear the thoughts of others here on the question of Sub2 refinancing.

I have a property I purchased subject to and I am now thinking I would like to refi this property with a bank that has a very good rate right now and no closing cost. My question is this considered a refi or a purchase? I own the deed but not the mortgage. How do you think a bank would look at this?

Thanks in advance!

[Account Closed]

Originally posted by @Karin Crompton:

This is good stuff. I assume we're talking about a rental or maybe a lease option? So here's another question: if I do a Sub-2 with a wrap and I've now sold the property and only hold a note for the new owner, I assume this no longer applies? Now the title is in Party #3's hands and I have nothing to refi? (Party 1 = original owner; Party 2 = me; Party 3 = new owner who I've sold to.)

Yup. Once you sell a property subject to other liens and/or create an additional lien, you are then a junior lender and no longer own the property.

Lease option is something else entirely. If you were to rent/sell to your buyer with a lease option, you are still the deeded owner until the time that that the buyer exercise their option to buy or the option expires. This assumes of course, that you bought the property from the original seller as didn't do some kind of lease option with them.

I like ownership. I like to own the equity. I like to be able to refinance and insure the equity I own. I like deeds. :)