Sale Subject to existing loan
Sale Subject to existing loan.
How can you Sale Subject to existing loan? Sale Subject to existing loan is a transaction when a buyer assumes or takes over debt payments of the seller.
This is an ideal case for sellers that have very little or no equity. Another case where this can be very beneficial is if the owner is behind on payments and facing foreclosure, or who owe more for a property than it is worth.
In order for you to be attractive for buyers, seller’s monthly loan payment has to be fixed. In this transaction the buyers take over the debt payments of the seller and make payments for the seller on seller’s behalf.
Buyer issues a promissory note to the seller. Seller deeds/transfers the property to the buyer. If the buyer defaults, seller can start foreclosure process and gets the property back. Buyer will lose all down payment and closing costs that were paid when property has been purchased.
Another option is to sell on Contact for deed subject to existing financing. This is in fact the preferred method that we recommend. Call us to find out why and we’ll provide all details behind it obligation free.