Dallas-Fort Worth Real Estate Investor Club

Subject To

  • 05 Apr 2022 6:57 PM
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    Message # 12695742
    Bernee Garcia

    Can anyone advise of any strategies that can be implemented in the case that your subject to seller wants to qualify for another mortgage so they can purchase another home, without jeopardizing the loan in place on the property I previously purchased from them?
  • 05 Apr 2022 11:00 PM
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    Reply # 12696025 on 12695742
    Robin Carriger (Administrator)

    Hey Bernee,

    I've had this very thing come up in my own experience.  IMO, the key was that the Sub2 seller who wanted to buy another home decided to use an investor friendly, local lender with "in house" underwriting.

    On the phone with the Sub2 seller's loan officer, I confirmed what the seller had told him which was that I had been making the monthly payments on the underlying loan for over a year.  The loan officer asked for evidence, I gave it to him, the loan underwriters were able to adjust my Sub2 seller's Debt-To-Income (DTI) ratio based on that evidence, and he was ultimately able to get the loan for his new home!

    If you have any questions, feel free to give me a call at 817-300-1132.

    Thanks,

    Robin Carriger
    President
    DFW REI Club
    (817) 300-1132
    Robin@DFWREIClub.com
  • 06 Apr 2022 8:39 AM
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    Reply # 12696459 on 12695742
    Tim Cook

    Bernee, Robin, this is one of the sellers objections we get most often when talking about buying a house Subject-to the underlying mortgage remaining in place.  What I tell my sellers is this:  1.  You may not qualify for the same value of home because of  your name being on this home.  2.  If you were in default when you sold your house Sub-to to me then you credit is going to take time to improve so do try and buy a house anytime soon but rest assured our on-time Pmts will be improving your credit score. And 3, I tell them to keep a copy of the sales contract to show the lender exactly how they sold it.  And of course they can give my number to the lender and ask them to call me if they have questions.  With the above combination of things I have never had a seller in 22 years tell me they couldn't get a loan because of how they sold their home.  Hope this helps Bernee.
  • 06 Apr 2022 10:03 AM
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    Reply # 12696646 on 12695742
    Bernee Garcia

    Gentlemen,

    Thanks for all the great info, this really helps alot!
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