Subject-To Financing

Subject-to financing is a real estate purchasing method where a buyer acquires a property while the existing mortgage remains in the seller's name. The buyer takes over the mortgage payments without formally assuming the loan, allowing them to bypass traditional financing. This can benefit the buyer by potentially securing lower interest rates or avoiding cumbersome loan approval processes. However, the seller remains responsible for the mortgage, and if payments are not made, it can impact their credit. Clear communication and legal agreements are essential to ensure all parties understand their responsibilities.