Some Advantages of Buying on Subject To
A Subject To is getting the deed to a property without getting a new mortgage. Instead, the seller signs over the deed to his home ‘subject to’ the existing mortgage. The buyer makes the mortgage payments on the seller’s existing loan, but does not take out a new mortgage to acquire the home.
Knowing when to use one is very important. Many times, investors try to fit one technique into every situation. That can be a very dangerous approach. You must know which technique – Lease Option or Subject To – to use with each seller, to protect not only yourself, but your tenant/buyer as well. Knowing which technique to use for your seller and their situation can save you tens of thousands of dollars in profit. There are many advantages of Subject Tos (some are the same as an option)
1. Minimum or zero down. Usually you only need to pay the seller a small amount to sign the deed over to you. If they owe more than you are willing to pay, then there are times that they will pay you to take the deed from them.
2. No financing required. When you do a subject to you don’t need to get a mortgage because you are taking over the seller’s mortgage payments. Technically, you are not assuming the seller’s mortgage. You are just making the payments on their existing mortgage.
3. Ownership. The day the seller deeds the property to you it is yours. You are the true owner of the home.
- No income or credit checks. Not once has a seller ever asked to look at my income or check my credit. They are more worried about their situation and how to get help from you.
- The Seller will love you! You will be making a positive difference in someone’s life.
Look out for my next blog. We will be discussing Subject Tos-The Risks and How to Avoid Them. To learn more about Subject Tos and the advantages you can read my Investing in Real Estate with Lease Options and Subject-to Deals book.