Subject-to Due on Sale Clause
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?
@Michelle Mullins
One way to find out for sure is to get the new insurance in place and send it over to the lender. I’m sure if they do call it due you will have some time to figure out how to get past it. Whether you refi or talk them out of it you will find a way.
Check out Pace Morby on YouTube for a video where he explains how to deal with that.
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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.
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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.
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Quote from @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.
Incorrect. You can transfer the deed back to the loan holders name, show the bank, and get it transferred back to you. This is one of many ways to avoid paying off the entire note.
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#2 All Forums Contributor
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Quote from @Eliott Elias:
Quote from @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.
Incorrect. You can transfer the deed back to the loan holders name, show the bank, and get it transferred back to you. This is one of many ways to avoid paying off the entire note.
come on now.. you transfer it back now you dont own it you have created a taxable event and now another taxable event for the seller.. and then when the seller transfers it back to you again your right in the same boat.. Geesh