A subject-to transaction is when a buyer purchases a property 'subject to' the existing mortgage, meaning the deed transfers to the buyer but the loan stays in the seller's name. 1st Option Title has deep experience with subject-to closings.
In a subject-to deal, the buyer takes title to the property while the existing mortgage remains in the seller's name. The buyer makes the mortgage payments, but the loan doesn't technically transfer. The buyer gets the property; the seller's credit is still tied to the loan.
Subject-to transactions are common when sellers are behind on payments, facing foreclosure, or have a low-interest rate loan they don't want to lose. Buyers benefit by acquiring property with existing favorable loan terms.
Subject-to closings require careful attention to the deed preparation, due-on-sale clause implications, and proper documentation. We work with experienced real estate attorneys and ensure the transaction is properly structured and closed.
The existing lender's due-on-sale clause may allow them to call the loan due when ownership transfers. Both parties need to understand this risk. We ensure proper disclosures are made and documentation reflects the actual structure of the transaction.
Contact 1st Option Title to discuss your transaction.