Posted on: 11th Jan, 2010 07:09 pm
Can you please explain how the purchase of a property "subject to" an existing mortgage works.
Why might the seller agree to sell a property to a buyer "subject to" the mortgage?
Does the buyer get the deed to the property?
What documentation of the transaction is required/recommended?
Does the bank need to be notified of the transaction?
What happens to the seller's interest and the buyer's interest in the property if the buyer fails to make the payments and the bank chooses to foreclose?
Thank you
Why might the seller agree to sell a property to a buyer "subject to" the mortgage?
Does the buyer get the deed to the property?
What documentation of the transaction is required/recommended?
Does the bank need to be notified of the transaction?
What happens to the seller's interest and the buyer's interest in the property if the buyer fails to make the payments and the bank chooses to foreclose?
Thank you
Hi jh!
Welcome to forums!
When a property is subject to an existing mortgage, it means that there is a mortgage on the property. The seller of the property has taken a loan and has not paid it off yet. He is simply selling off the property with the loan. As a buyer, you'll have to refinance the loan in your name once you purchase the property. Thus, you'll liable for both - the home as well as the loan. In that case, if you fail to make payments, the lender will foreclose the property and it will affect you.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
When a property is subject to an existing mortgage, it means that there is a mortgage on the property. The seller of the property has taken a loan and has not paid it off yet. He is simply selling off the property with the loan. As a buyer, you'll have to refinance the loan in your name once you purchase the property. Thus, you'll liable for both - the home as well as the loan. In that case, if you fail to make payments, the lender will foreclose the property and it will affect you.
Feel free to ask if you've further queries.
Sussane
be very cautious in this circumstance. if you don't have a lawyer, find one, and send this contract along, asking the same questions as asked here. my suspicion is that you will be advised not to sign it.
