Posted by chet on February 03, 2005 at 21:58:15:
due on sale.
They can demand the full note balance (check if assumable). If you don’t pay they prob will start foreclosing.
Subject To - Posted by Lynn
Posted by Lynn on February 02, 2005 at 23:18:26:
What are the risks of buying subject to the seller’s current financing? Can the bank take the property to foreclosure if it has been deeded to you? I understand the lending institution probably would want to work with you, but what if you couldn’t qualify for conventional financing because you were just getting started in real estate investing? Seems to me that if you continued to make payments to the seller’s lender and the lender decided to foreclose you could be out all the payments you made to the seller’s lender.
Also, it seems that buying subject to is a bit unethical since you are basically asking the seller to go back on what they promised to do. Do most lenders expect this?
Re: Subject To - Posted by River City
Posted by River City on February 04, 2005 at 12:20:58:
Most fixed-rate loans have a due-on-sale clause if anything changes in the title, except under certain circumstances. If the loan is an ARM, most mortgage Notes indicate that the purchaser must qualify with the lender to assume the payments. If the lender requires a purchaser to be qualified by them, they have the right to enforce the due-on-sale clause if this is not done. And, yes. You would lose all the money you invested in the property.