Assume Mortgage

Buying Subject to is a Better Arrangement

Assume Mortgage, When People Talk About Assumable Home Loans, I Believe They Are Really Talking About Buying Property Subject To The Existing Mortgage Loan.

Assume Mortgage as a way to buy mortgaged real estate is old school.

With mortgage rates at an all time low and all the headaches attached to assuming an existing mortgages it just does not make since to go in that direction.

When real estate mortgage rates were 8% or 9% and you spotted a real estate ad "Assume Mortgage" it was a different matter.

Besides, if you go to the lender to fill out the paper work it's about the same as getting a new real estate loan and there are Loan Assumption Fees... And the lender may want to increase the loan rate. For Mortgage Information Go To: Real Estate Loans.

I think, what most people have in mind when they talk about Assume Mortgage is they are really thinking about is buying real estate Subject to the Existing Mortgage.

Buying Homes Subject to The Existing Mortgage Can Be a Good Deal.

However there is some risk for both the buyer and the seller, because all the mortgage loan documents that I have seen in the last 10 years have a "Due on Sale Clause" in the Trust Deed. Due on sale is also known as "Alienation Clause."

If you are interested in assuming an existing mortgage you would be required to have the lender provide the original borrower a release of liability on the loan. And you would become legally responsible for the real estate debt. Also your Credit must be good enough to qualify.

If You Are Interested in Buying Real Estate Subject to The Existing Mortgage. You Have Landed at The Right Spot.

Lets look at some of the reasons a home owner would agree to sell you her home and let you buy it subject to the existing mortgage or assume mortgage.

• Financially cannot afford the home.

• Moving out of the area and homes are not selling.

• Not enough equity to pay the real estate commission.

• Real estate market is dead nothing is selling.

• Pending foreclosure sale.

After they have tried to sell their property using all the traditional sales methods, owners get disparate. Go to Real Estate Options.

At this point when sellers have some one ask to assume their mortgage they start to listen... however most sellers do not have a clue what’s at stake if they let someone take over their mortgage.

All they are thinking about is anything is better than making payments on a vacant house or letting the real estate foreclose. This is a highly motivated seller...

When you buy real estate Subject to the Existing Mortgage it means your buying the property with the seller's mortgage loan still in place. And the seller is on the hook for the mortgage payments until the loan is paid off.

The next question is who will be making the mortgage payments? If the seller is in financial trouble do you want that person responsible for making your mortgage payment? Not Likely.

So how do you keep the lender out of the picture? Because there is a due on sale clause in the trust deed. And how do you protect yourself from the seller getting liens on the property, selling it to another person or not making the monthly payments? All of these things have happened many times...

The Answer is Simple: Place The Property Into a "Revocable Trust."

Why a Revocable Trust ? Because this legally takes the seller out of title, but it does not activate the due on sale clause.

After the property is placed into a revocable trust the seller cannot mortgage, refinance or sell the property to anyone without your written approval. However with an assume mortgage you are responsible for the loan.

There are a number of steps that should be taken at the time you start your negotiations with the seller if you want to use this method of buying real estate subject to the existing mortgage rather than assume mortgage.

You may need more information in order to structure your revocable trusts and establishing control of the mortgaged property.

Why Buy Real Estate Subject to the Mortgage? Why Not Assume Mortgage?

• Loan assumptions always require lender approval.

• Today most real estate loans are not assumable.

• Buying real estate Subject to. No Credit required.

• You, the buyer are not liable on the underlying mortgage.

• No Loan Fees... No Credit Checks... No Hassles...

It is desirable to have the lender deal directly with you, the buyer, and then you will be making the monthly mortgage payment and the lender will be sending you tax statements, escrow statements and year end 1099’s for interest deductions.

You also will want to be able to claim the mortgage interest as an income tax deduction. This requires some minor paper work at the time you are negotiating your purchase.

Keep This In Mind When Negotiating With the Seller: It’s Not What You Ask For, Its How You Ask That is Important.

There is a whole lot more to buying real estate "Subject To" than I have provided information on, but one thing that I did not talk about is real estate investors can also buy apartments and other commercial property using the Subject Method.

If You Are Looking For a Sweet Real Estate Deal "Do Not" Count On Realtors to Bring You The Deal of The Century.

Realtors have the habit of selling the sweet-hart deals to their friends and family.

If you're having difficulty finding "competent help" setting-up a subject to purchase you can "e-mail me" through our Contact Us Page and schedule a time to discuses your purposed real estate transaction. Provide me a brief outline about your transaction... This is a FREE service to our viewers...

Ask About Our Sample Paperwork for "Buying Subject To."

Assume Mortgage may not be the best way to buy real estate. Try to buy Subject to. Study this real estate site and tell me what other information you would like to see published.

ASSUME MORTGAGE: If you find yourself with legal issues and do not want to hire an attorney or don't have the money go to Jurisdictionary is the way to go if you have a pending lawsuit. Watch the FREE Instructional Videos. Left Side Half Way Down...

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