Difference between owner finance & subject to? - Posted by LISA

Real Estate Investing Real Estate Financing
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Posted by Buck on July 22, 2002 at 09:56:48:

This may be a sub-category of Contract for Deed, but owner financing may also include a wrap mortgage. This is where, for example, you want to buy my house. I finance to you $100,000 @10% for 30 years, but I have a mortgage for $80,000 @6% for 22 years.

You’ll may me $878 for 30 years. I’ll pay the bank $547 per month and pocket $331 for 22 years, and then pocket $547 for 8 years.

Of course, I have to be young enough to last that long :wink:

Have a good one

Buck

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Difference between owner finance & subject to? - Posted by LISA

Posted by LISA on July 22, 2002 at 02:02:44:

What’s the difference between selling a house owner finance or subject to??

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Hope this helps. - Posted by JoeS

Posted by JoeS on July 22, 2002 at 06:36:55:

Selling “owner finance” means that the owner of the property holds the mortgage papers and the buyer pays that person each month. Selling “subject to” means that there a bank-held mortgage that the seller has, they are paying the bank each month and the buyer is taking that over. The seller of the property does not receive the payment every month it goes to the bank or mortgage holder.

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Re: Hope this helps. - Posted by Eva

Posted by Eva on July 22, 2002 at 08:03:40:

Does this also mean that the property is free and clear? (I would think so if the owner is financing it??) Thanks.

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Re: Hope this helps. - Posted by BillFL

Posted by BillFL on July 22, 2002 at 09:15:08:

Normally, but not exclusively. A contract for deed is a type of owner financing, even though the property could have a mortgage in place.