Can someoneplease point me in the right direction? I have found a person willing to let their house go on a Subject to deal but I want to keep the home for me. I live in Virginia and I have never done this type of transaction. I have no idea what paperwork I need or how to get it done there is so much info on this site, I just don’t even know where to start? Help!!
Hi,
Buying the house subject to is easy provided you do it correctly! Do you have a contract with a box to check or a space to write into for subject to financing? Read the financing section of your contract to see if there is a subject to box or a space to write into?
Basically in subject to you are going to get deed at close of escrow and financing by taking over and paying the underlying debt in the current monthly payment agreement.
So any down payment with existing subject to with closing costs!
The existing payment will need to be auto paid from a new checking account or paid by an escrow servicing account. Seller will set up deposit account at bank so it appears the payment is still coming from him even though you deposit to it every month to pay the payment.
The insurance will require you being added to his insurance as an additional insured, or you and the seller getting a new insurance policy in both names or you getting a second insurance policy in your name but that means your actually paying twice for insurance.
What area of Virginia is this property in? I grew up in Fairfax County in northern Virginia.
GR
Gold River makes many viable points to consider. If this was my transaction, I would include these actions:
- written contract with agreed terms;
- specific power of attorney for mortgage account and insurance policy by seller to buyer;
- quit claim ownership into a trust (not a red flag for mortgage company as this is a standard financial planning / estate planning tool);
- written trust document for above terms;
- create new trust bank account for mortgage payments etc.;
- move in!
Hope this helps.
Rob