A subject-to close is a case worth walking through step by step

Subject-to financing is one of the strategies worth explaining plainly, because the mechanics confuse people who otherwise understand deals well. What it means: the seller's mortgage stays in her name, the deed transfers to the buyer, and the buyer makes the payments from closing forward. The buyer typically pays the seller something for her equity. No loan application, no credit involved on the buyer's side. Take a representative case. Three bedroom, one and a half bath, 1,180 square feet, in a neighborhood where similar houses rent for $1,850. Loan balance $198,400 at 3.375 percent with 26 years left. Full payment including taxes and insurance runs $1,412. A seller who has moved for work, is carrying rent in a new city plus this payment, and holds a house worth maybe $232k with a fee-hungry listing agent quoting closing costs she doesn't want to pay, is a common candidate for this structure. A buyer might pay $9,000 for her equity, split as $4,000 at closing and $5,000 over ten months. A detail that regularly nearly kills these deals: a spouse who isn't on the loan but is on title from the original purchase. Title catches it, and getting a signature from someone two states away and mildly annoyed at being asked can take a week or two of phone calls where the buyer mostly listens. The part that separates a well-run deal from a reckless one is sitting with both sellers and reading the due-on-sale clause out loud. The lender is allowed to demand the whole balance because the property changed hands. It usually doesn't happen while payments stay current, but a buyer should be able to state plainly what the plan is if it does, refinance or sell, before the deal is worth doing at all. Paying part of the equity over time rather than all at closing is generally the right call too, since it preserves cash for reserves.