subjectto
Subject-to, in real estate, refers to a method of acquiring property where a buyer takes title to the property subject to the seller’s existing mortgage. The mortgage remains in the seller’s name and on the property’s lien, while the buyer assumes control and makes the loan payments according to the original terms. Because the loan is not formally assumed, the lender’s consent is usually not obtained, and the seller remains technically liable for the debt. The transfer of title does not extinguish the mortgage lien; if the lender accelerates or forecloses, the lien can still impact the property.
Mechanics often involve transferring ownership via a deed while arranging for the buyer to make payments to
Uses of subject-to arrangements are most common in creative financing, particularly among real estate investors, in
Risks and considerations include the potential for the lender to invoke a due-on-sale clause or accelerate
See also: mortgage assumption, due-on-sale clause, wraparound mortgage, land trust.