I have someone who wants me to take over payments on a house in Texas. They are willing to leave the existing financing in place and allow me to make the payments. I know there have been different laws passed that have made sub2 more difficult (or are they even still possible??) in Texas. I would like to add that I would be occupying the property as primary residence.
If it is possible can someone point me in the right direction to find up to date info on what is required to carry this out? Sub2…deed? etc? I want to make sure I am protected from the possibility of the seller doing anything that would add additional liens etc on the property.
When you fill out the TREC contract form 20-8, fill out the owner financing section under Section 4c if memory serves me correctly. You need also the owner financing addendum. Once these two forms are signed, take it to the title company, use LandAmerica Lawyers title, they handle owner financing.
They will prepair the paperwork, and call you to come in and sign the deed, note, and deed of trust.
There is nothing illegal about a Sub2 transaction in Texas. I have done several over the last couple of years. It is lease/options that are heavy restricted. But you use a wrap-around mortgage to get around lease/option issues as well.
If you have never done a Sub2 deal then I would also recommend you use a title company to close as they will make sure everything is on the up and up. Otherwise you can do a table top closing… using a Land Trust .
They are willing to leave the existing financing in place and allow me to make the payments. I know there have been different laws passed that have made sub2 more difficult (or are they even still possible??) in Texas. I would like to add that I would be occupying the property as primary residence.
Look at House Bill 1823 or talk to a Texas Real Estate Attorney about the laws regarding Lease/Options in Texas. As stated previously, Sub2 are legal in Texas. I closed on how two weeks ago through a Title company.
It does not matter if it is your primary residence or if this is an investment property if the owners are willing to let you take over payments then you could go either way… wrap around mortgage or through a Sub2. The only difference stated in the contract is if you are using the existing mortgage or if you will have new (provided by the current owners). – Side note to this… after discovering Subject To transactions, I will buy all of my primary residences this way.
Wanted to address manifesto posting: “I want to make sure I am protected from the possibility of the seller doing anything that would add additional liens etc on the property.”
If you go through a title company, all the correct documentation will be recorded at the county court house. If you do a table top close, then it will be up to you to record the necessary documents so that the seller can not come back on you. If the sellers are acting weird about the transaction… I would pay the closing costs and use the title company to cover your basis.
Make sure and talk to the attorney about adding an “Interest Deduction” clause or addendum so that you can deduct the interest on the mortgage. Make sure it’s specified on your documentation.
Sub2 is legal in Texas as long as it complies with the new law requirements. You need to get written approval from lenders, or have certain types of documents. Title companies would close them, but that does not mean you are not liable.
The bank can do whatever they want as far as calling the mortgage. You would use a landtrust so as to not throw up any red flags for the bank to suspect a transfer of ownership.