A “subject to” is a creative way to buy a house where the existing mortgage stays in the seller’s name, but the buyer takes over making the payments. Here’s how it works:
- You (the seller) transfer ownership of your property to me (the buyer).
- Your current mortgage remains in place—it’s not paid off or refinanced at closing.
- I take over responsibility for the monthly payments, property taxes, insurance, and all other costs.
- You get relief from the burden of the mortgage and property, while I handle everything moving forward.
This strategy is often used when a seller needs to move quickly, is behind on payments, or doesn’t have enough equity to sell the traditional way. It’s a win-win: you avoid foreclosure or a short sale, and I get to buy the property with the existing financing.
Have more questions?
Check out our FAQ (below) or contact us for a free, no-obligation consultation!
Subject To: Frequently Asked Questions (FAQ)
1. Is this legal?
Yes. This type of transaction is known as a “subject-to” deal, which is legal in many states when properly structured. The homeowner’s mortgage remains in their name, but the deed (ownership) transfers to me (the buyer). All paperwork is handled by licensed professionals to ensure legal compliance and transparency.
2. Will I still owe the mortgage after the deed is transferred?
Technically, yes — the loan stays in your name. However, I take over making the payments and bring the mortgage current. As payments are made on time, your credit can begin to recover. You are no longer responsible for maintaining the home or paying taxes, insurance, or repairs.
3. What happens if the buyer stop making payments?
This is a valid concern. If I (the buyer) stop making payments, the lender can foreclose on the property. This would hurt your credit (since the loan is still in your name), and I would lose all the money I’ve already paid and any investment I’ve made in the property. It wouldn’t make sense for me as the buyer to stop making payments, because I would lose everything I’ve put into the deal.
4. Can you sell or transfer the contract to someone else?
Yes, I may work with another investor or assign the contract to a trusted partner who will complete the purchase. This does not affect the terms of our agreement or your proceeds.
5. Why do you need the deed?
I (the buyer) need the deed to legally take ownership of the home so I can:
• Make necessary repairs or improvements
• Resell or rent the property
• Ensure proper management of taxes and insurance
Without the deed, I wouldn’t be able to assume financial and legal responsibility for the property. We work with a local title company experienced in handling “subject-to” transactions. They manage the legal transfer of the deed from the seller to buyer, ensuring everything is done properly and recorded with the county. The seller has full access to the title company handling the transaction and may contact them at any time to ask questions, request updates, or review documents related to the sale.
6. How much money will I get?
Every situation is different. After bringing the loan current and reviewing the property’s value, I provide you with a cash payment to help with relocation or starting fresh. The exact amount depends on the property’s equity and condition.
7. Will this affect my credit?
Yes, but in a positive way. Since foreclosure is avoided and your mortgage becomes current again, your credit can begin to improve over time. You also avoid bankruptcy, which can be more damaging in the long run.
8. Do I need to move out?
Yes. To complete the transaction and transfer the deed, you must vacate the home. However, you’ll receive a cash payment to assist with moving and starting your next chapter.
9. Can I talk to someone before I decide?
Absolutely. I encourage every homeowner to speak with:
• An attorney
• A financial advisor
This ensures you’re fully informed and comfortable with the decision
Important: The loan stays in your name until it’s paid off or refinanced, but you are no longer responsible for the property or its expenses.