I am new to this, but have access to mortgage & real estate folks that will help me along the way. I have a quick question. Here is scenario.
I am buying a property for a person Subject To. If I am correct, the title will now be in my name and I will be responsible for mortgage (although I realize technically the original borrower still has note in his name and ultimately responsible).
The question is, the borrower would like to sell me the property Subject To, then he want to buy another home for him to move into.
Will the Subject To property mortgage still reflect on his credit report?
Since I have put a contract to buy property and title will be in my name, will he have a problem obtaining a mortgage and will this reflect as another mortgage when he is applying for a home?
Will the Subject To property mortgage still reflect on his credit report?
Yes, the mortgage will still reflect on the sellers credit report.
Since I have put a contract to buy property and title will be in my name, will he have a problem obtaining a mortgage and will this reflect as another mortgage when he is applying for a home?
I have found that it is the Mortgage Brokers job to show that the property has been sold using the Subject To method, which they have done for me many times for my sellers. So, yes the seller can purchase another property, however they normally use 75% as a figure of the monthly payment they will consider as not owing by the seller. In essence if the payment is $1000 a month on the property, $250 will show on the sellers Debt to Income ratio when applying for a new loan.