Sub to payments.

Member since 2022 · 2 posts · 0 votes

Hi bigger pockets! I’m learning a lot about subject to purchases but some of the details are lost on me. Can someone explain to me how payments are made on the debt after the transaction takes place. Does the buyer pay the mortgage servicing company directly? Does the buyer pay the seller who then services the debt? In either case, how can the buyer and seller ensure the other will follow through with their payments and what legal grounds does either party have in the case of default?

Thanks for the help!

-Andrew S.

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Ke Nan Wang
Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes
3y
Buyer pays a mortgage service company. They charge a small fee for the service and there are probably thousands of them out there. Once it's setup with automatic payment it's on autopilot. Just like how you pay your own mortgages.
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Wendy PattonBusiness Member
Real Estate Consultant · Clarkston, MI · Member since 2009 · 864 posts · 350 votes
3y

@Andrew Smoot when you do a subject to you pay the payments directly. I have them auto withdrawn from my account. Normally if the sellers are worried too much about you making the payments they won't sell it that way, however if they are they can log in each month to their account to see their payments are made. It's easy and I don't use a servicing company as that costs money and puts someone else in the middle. I like the control of making those payments directly - also all their mail and information about the property (attached to that mortgage) come to my office.
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