Buying a House Subject To

Posted by Obsidian Home Solutions on February 23rd, 2018

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.

What is buying a house Subject To?

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.

Three types of buying a house subject to options, according to The Balance:

1. A straight subject to cash-to-loan. The most common type of subject to is when the buyer pays in cash the difference between the purchase price and the seller’s existing loan balance. For example, if the seller’s existing loan balance is 0,000 and the sales price is 0,000, the buyer must give the seller ,000 in cash.

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