Step By STep First Buy

Okay all the players are in place and we have a house that we like. The owner has moved out of teh state and has let us know that he does not want anything to do with the house. My question is can we assume his loan? Basically just take it over? We are looking at the quickest way possible (with minimum fees ) to get this house. Would assuming the loan be a good thing and is there a better way to go about it?

Thanks for the feedback,


Howdy Buster:

Some loans are assumable without even qualifying and some are assumable with qualifying and some are not assumable at all depending on the investor who owns the loan. You can buy the house subject to the loan. Get the deed from the seller along with a letter to the mortgage company giving you permission to inquire about the loan. You can usually fax a written request to them and get info like is the loan assumable, and fees to assume and other info such as $ to cure default and balance.

Before spending cold hard cash do a title search to make sure their are no liens or judgements and that the seller owns the property.

Like you said it would be cheaper and easier just to get the deed and start making payments without assumption of the loan. Do the sub2 for now and maybe later you will want to assume if you can.

Appreciate the info but I do have a couple questions how do I do a search on the title and what is the sub2? Again sorry I am so naive and I appreciate all the help and the feedback I get from this great site!


Howdy Buster:

No problem being naive. We all have to learn somehow. This is a great way to learn, especially before doing a deal.

Sub2 is just shorthand for buying a house subject to the mortgage.

Title searches are usually done by title companies in a lot of states that issue title insurance, Some states have attorneys that search the title. The county courthouse keeps all the recorded deeds and other docs affecting the title to property. You can do it there too but I suggest getting professional help.

You just want to make sure that the seller owns the property and there are no unknown liens or judgements against it or the seller. The more money involved the more you need this and the more I recommend title insurance. If you only have a few bucks and time invested you may not want to spend the money for insurance. If you are getting a new loan to buy property most lenders require title insurance on their loan ( mortgagee policy) and for a few more $$ you can insure the owners portion (owners policy) .