House take over payment
A reader asked me recently what I thought about buying a house take over the payment and move in.
This is called buying subject to the existing mortgage. You buy the house when the owner deeds it to you. Now you are the new owner. Many people don't realize that the loans that were on the house remain on the house after the house ownership is deeded to you.
Typically the seller will have an existing loan. Nowadays the loan may equal the fair market value of the house, or even be over it. If you find a house where the loan equals what you think the house is worth, why not offer to buy the house subject to the existing loan?
Many people don't know this can be done. The real estate purchase contracts that many real estate agents use don't have boxes to check off for this. Write it in.
Buyer buys house subject to existing loan — works great. This is a no money down or little money down house purchase with no qualifying and no bank loans.
Now that you own the house, you can start making the payments. You will need the seller's social security number and access to the bank's automated system for making sure you know the balance due and how much is owed and so forth.
Most loans have a due on sale clause. Technically the lender can accelerate the loan and make it all due and payable as soon as they hear of the transfer of ownership. I don't know of anyone who has had this happen. Especially today the last thing a lender wants is a non-performing loan.
More importantly, you want to someday assume the loan, just to get the seller out of the picture. I have heard of people doing this without filling in any financial information. I've done it myself. Just notify the lender "I own the house, send me an assumption package" and then I just fill in my name and address and sign it. I have never provided detailed financial information. I photocopy the deed and send in the package. Some lenders require you to live in the house and make payments on time for 6 months or 12 months and then they will let you assume the loan with no qualifying.
Of course, in today's world I'd be very careful about assuming a loan. Has this info been helpful? Subscribe to my powerful email list and get access instantly to my 25 page report Keep Your Home along with email tips you won't hear anywhere else on avoiding bankruptcy, lowering your payment without getting a new loan and more. Privacy is assured and you can unsubscribe anytime you want.