Subject-to Due on Sale Clause

[Michelle Mullins]

We purchased a triplex through creative financing and inherited the insurance through the seller. If we were to transfer the insurance to a new company - would this trigger the due on sale clause with the mortgage company?

[Jay Hinrichs]

Quote from @Eliott Elias:

No one can tell you for sure. I have never seen it happen. You need to get a new policy with your name on it and the sellers as additional insured.

well having done well over 100 sub toos.. I never took the insurance out of the sellers name as that is a huge red flag to have the loan called.. And there is no talking them out of it once they do you either pay it off in cash or refi or its going to foreclosure.   Leave insurance were it is and just get your own insurance policy cost you a few extra bucks having two policies but since you got sub too with all the perks that go with it an additional insurance policy should not be a big deal. we had a master policy for all our props so we just added them as they came on line. Of course this is when you have over 100 props in your portfolio  one off you simply need to buy that one off insurance.