1. No Need for New Financing: You don’t have to qualify for a new mortgage or go through the lengthy bank approval process. This saves time and avoids the strict lending requirements of traditional loans.

2. Lower Upfront Costs: SubTo transactions often require little to no down payment, making it easier to acquire properties with minimal cash outlay.

3. Control the Property: As the buyer, you take ownership of the property and can rent it out, sell it, or refinance it later to extract equity.

4. Flexible Terms: You can negotiate favorable terms with the seller, such as lower interest rates (based on their existing loan) or flexible payment schedules.

5. Build Equity: You benefit from any appreciation in the property’s value and can build equity over time.

1. Take Over Payments: You assume responsibility for the seller’s existing mortgage payments, property taxes, insurance, and maintenance costs.

2. Title Transfer: The seller transfers the property title to you, but the loan remains in their name.

3. Third-Party Servicing: To ensure payments are made on time, a third-party servicing company can be set up to handle the mortgage payments. This protects both you and the seller.

4. Performance Deed: In some cases, a “performance deed” or “deed in lieu” is signed and held in escrow. If you default on payments, the property can be transferred back to the seller after a 30-day period.

Yes, Subject-To and other types of creative financing are completely legal! In fact, real estate closing documents often include language for loans being assumed "Subject-To" the existing financing. These transactions are common and occur daily. You can verify this by reviewing line 203 in the HUD closing statement: HUD Closing Statement Example.

Even though there’s no formal mortgage approval process, you’ll be assuming someone else’s loan. The seller must be confident that you’ll make timely payments and avoid damaging their credit. Our innovative preapproval process ensures the seller that you’re a reliable buyer.

1. Mortgage Payments: You are responsible for making the monthly mortgage payments on time.

2. Property Maintenance: As the legal owner, you are responsible for all repairs, maintenance, and upkeep of the property.

3. Insurance and Utilities: You will need to transfer the property insurance and utilities into your name. The seller will be added as an additional insured on the policy for their protection.

4. Long-Term Strategy: You should have a plan to either refinance, sell, or pay off the property in the future.

Most mortgages have a "due-on-sale" clause, which allows the lender to demand full repayment of the loan if the property is sold or transferred. However, this clause is rarely enforced. To protect yourself:

• Specific language can be included in the closing documents to address this risk.

• If the clause is triggered, the property can be deeded back to the seller temporarily, and the transaction can be restructured.

If you fail to make payments, the seller can reclaim the property through the performance deed or deed in lieu. This means the property would revert to the seller, and you would lose any equity or improvements made.

The mortgage will remain in the seller’s name until the loan is paid off. However, as the buyer, you can refinance or sell the property in the future to pay off the loan and take full ownership.

• No Bank Approval: Avoid the hassle of qualifying for a new loan.

• Quick Closings: SubTo deals can close faster than traditional purchases.

• Build Wealth: Gain control of properties with little upfront cash and benefit from appreciation and rental income.