You may have heard a whisper in Springfield about buying a house subject to, especially in a rising interest rate environment. Using subject to is also a way that a real estate investor can save the credit of a homeowner floundering in financial difficulties.
Buying “subject to” means buying a home subject to the existing mortgage.
It means the seller is not paying off the existing mortgage and the buyer is taking over the payments. The unpaid balance of the existing mortgage is then calculated as part of the buyer’s purchase price.
A twist is for real estate investor evaluating the seller’s property. He sees what needs to be done to the house to meet today’s buyer’s needs, and makes an offer. However, the buyer cements the deal with the seller conveying the deed to the buyer, leaving the mortgage in the seller’s name. The buyer makes the payments along with any missed payments. Curing the default saves the house from foreclosure and saves the credit of the seller.
Charlie France of CRE Online tells us, “The two main reasons are “time” and “debt relief.” If someone is being transferred, divorcing, buying a new home, or financially strapped, we can buy TODAY so that you can move tomorrow.
A real estate investor can offer the seller instant debt relief and help them out of their situation. At the same time, we can help a buyer looking for a house. One who does not, for some reason, have perfect credit and cannot purchase a home using conventional methods.”
How is “subject to” different than assuming a mortgage. Assuming a mortgage means more than taking over the loan. If you assume the loan, the bank will make you qualify for the loan and restrict the amount of money you can borrow in the future. When you purchase a house “subject to” the bank is happy because they are getting paid and there are incentives from the government to maintain the status quo.
Since our inception, we have been helping homeowners along with improving communities in every city in which we work.
We have extensive knowledge of the business, a network of resources, and years of expertise. Obsidian Home Solutions can assist homeowners with a wide variety of real estate problems. We pride ourselves on our reputation for working one-on-one with each customer to handle their situations.