Posted by Ed Copp (OH) on March 31, 2000 at 13:29:07:
Greg, The Mortgagee is the one who is receiving the payments…ED
Meaning of “subject to”… - Posted by Ingrid in FL
Posted by Ingrid in FL on March 31, 2000 at 12:07:28:
Please do not think I’m stupid by asking this, but what is the basic idea when I hear folks say “buying the home ‘subject to’ an existing loan”? I realize this has something to do with a due on sale clause, but so far, it’s just not “clicking” if you know what I mean.
Thanks!
Ingrid
Re: Meaning of “subject to”… - Posted by Greg in Dallas
Posted by Greg in Dallas on March 31, 2000 at 12:32:43:
Ingrid,
When you buy a property “subject to” you simply continue making the payments as though you were the mortgagee. You never sign personally for the loan and your name never shows up on any of the loan documents.
The due on sale clause comes in to play when you buy a property like this and the mortgage contains a due on sale clause, in other words, it’s not a NQA (non-qualifying assumable). However there are ways around this too, by using a trust.
To put this particular clause in a contract you would simply strike out any places in the contract that speak about “assuming” the loan and replace it with “buying subject to”.
There are several good courses you could pick up from this sight that can help you with this subject.
Happy investing,
Greg in Dallas