The “Subject to ” Method of Selling a Home Allows Buyers to Assume Responsibility for Mortgage Payments
There are times when a person who has taken out a mortgage on a home, loses the ability to make the needed regular monthly repayments, either because they have lost their job or run into other financial problems. They then face the possibility of a foreclosure that can have a significant impact on their future finances.
At such times using a “subject to” method to sell the house quickly can easily take them out of the situation they find themselves in. In such cases, they have to find investors or buyers who are prepared to assume the responsibility for the mortgage payments. This non-traditional creative way of selling a house is an option that is available in today’s estate market. For many sellers who have a problem meeting their monthly commitments, it is often the only option that can help them to avoid the stigma attached to foreclosure.
This method is a solution for those who are short of time, and even more so, the finances needed to continue with their mortgage payments. The buyer just picks up from where the seller has left off, and the lender is not inconvenienced in any way. In a “subject to” sale, the buyers accept the house with all its problems for repairs as well, and this can often leave the seller with very little choice in selecting the right buyer, as time is pressing, and the lenders are uncompromising.
This way of selling a house bypasses the banks who can, in their own way, obstruct such sales. Most mortgages are made with certain clauses, and one of them is a clause that makes the entire mortgage amount to be rendered due on sale. If the lender banks enforce this clause, the buyer will have to repay the extent of the balance due on the mortgage, before a sale can be made. This clause is more of a contractual right and not in any way, a law. But enforcing this clause can be quite cumbersome and time-consuming, and banks are aware of the costs involved to go through any foreclosure proceedings. So, in most cases, lenders will not have a major problem accepting the buyer, as enforcing the “due on sale” clause can often not be cost-effective.
The “subject to” method need not be the first choice for sellers, but is an available option, if they are running out of time, and not able to arrange any other solution to their financial problems. The method itself is a perfectly legal one. It can be a good way of buying a house for buyers who are not able to come up with the needed down payments for a home but have no problem taking on the mortgage payments. It allows them to buy the homes that they need, without having to qualify for a mortgage.
However, in case the buyer is not able to make the needed mortgage payments, both the buyer and seller can be affected, if the lender than applies for foreclosure. The seller needs to conduct due diligence before opting for this method.
Whether or not you need to sell your home fast because you have fallen behind on your mortgage payments. Or you owe more than what your house is worth, or you have negative equity, or you’re a victim of fraud, we can help. If you are thinking about selling your house to avoid a pending foreclosure, we can help. Go here www.needtosellmyhousefastindenver.com and fill out the property information form to get a firm cash offer for your property.