"Subject To" and "Land Contract" - Posted by Daryl

Posted by Daryl on May 24, 2000 at 08:53:53:


“Subject To” and “Land Contract” - Posted by Daryl

Posted by Daryl on May 23, 2000 at 18:55:51:


QUESTION: What’s the difference between “Subject To” and “Land Contract”?

Are they not the same? In both situations you are getting seller financing and you don’t take title, right?

Does “Subject To” the existing loan mean that I am taking over his/her mortgage payments and the “Land Contract” is just a form of seller financing and NOT assuming the mortgage but having different terms? Would that be the only difference?

I think I’m almost there with this. NOT SURE!

Thanks for the help!


Re: “Subject To” and “Land Contract” - Posted by WilliamGA

Posted by WilliamGA on May 23, 2000 at 20:34:21:


“Subject to” usually means that you are taking title to the property “subject to” the existing mortgage. In this case you would be getting title to the property and you would be keeping the existing loan on the property. This is good for several reasons, you do not have to qualify for a loan, there are no closing costs and “junk fees” associated with geting a new loan, and the loan will stay in the sellers name giving you no liability for the loan other than your moral obligation to make sure that the payments are made as agreed. “Getting the Deed” is a term usually used with taking a property “subject to”.

In a land contract situation, you probably won’t get title to the property until you fulfill the terms of the contract, usually payment in full. When buying a property under a land contract, there may or may not be existing financing already in place.

While these two terms can be used together when doing a deal, they have very different meanings.

Good Luck!