Updated about 2 years ago on . Most recent reply
Subject To Financing
As I understand it, subject to financing is a way for the buyer to purchase a property, while the seller remains responsible for the original note. You then pay the seller over time, and then the seller is paying the lender.
This leaves me with some questions:
1) How can you be sure that the seller is actually paying the mortgage? They could just take your money and not pay the mortgage, right?
2) What happens if the seller is unable or unwilling to make payments on the loan? Would the property move into foreclosure, even though it's the buyer that owns the property?
3) How can I keep track of how much remains on the mortgage? Will the seller provide a monthly statement to me?
4) How does the exchange in equity occur? Since this transaction involves 3 entities, it's not clear to me how equity is increasing or decreasing for the buyer and seller over time?