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In real estate investing, the term "subject-to" often refers to a creative way to buy or sell a property subject to its existing financing. For investors, there are benefits to using subject-to in buying or selling real estate, but only in the appropriate scenario. Read on to get a better understanding of what a subject-to clause is, as well as the pros and cons of buying or selling a subject-to property.
Subject-to financing is a legally binding clause of the contract that allows the buyer to purchase the property subject-to its existing financing, meaning the buyer takes over the payments of the current mortgage loan. The exact terms of a subject-to scenario can vary greatly, but most require some sort of down payment in cash to the seller, with the buyer taking over the current payments or possibly paying slightly more because of a wraparound mortgage. RESOURCE: https://www.millionacres.com