Subject To is fine and it works when the right situation presents itself (which is actually pretty rare) and if you have the $30,000 or so, to take over the loan and guarantee that the payments will always be made. It is not zero down and has never been zero down and anyone who says it's zero down is either XXXX or XXXXing to you. ;-) Please don't believe them.

However, when someone has a mortgage that is current and they want to sell their property for more than what their loan balance is and maybe get some of their equity to cashflow, they can sell, they can do a Wrap.

A Wrap simply put, is selling a property, creating a mortgage that includes the existing mortgage and some portion of the equity into a new mortgage. Confused yet? Existing mortgage is mortgage 1. The owner has a mortgage of $250,000. But, their property is worth $400,000. They don't want to walk away from $150,000 in equity, so you take their mortgage of $250,000 add $150,000 to make up the $400,000 in a new mortgage 2. The buyer makes payments to the seller. The seller keeps making payments to their mortgage company and the seller keeps the difference between what the buyer pays the seller and what the seller pays to their mortgage company.

Some places like CA TX AZ GA OH prefer using Wraps instead of using Subject To.