Frequently Asked Questions

A “Subject-To” purchase means the buyer acquires ownership (title) to a property subject to the existing mortgage that remains in the seller’s name. The lender and loan stay the same, but the buyer agrees in writing to make the mortgage payments and maintain the property.

Yes. The existing mortgage remains in the seller’s name until it is paid off or refinanced at a later date. The buyer does not assume or transfer the loan. The buyer agrees to make the mortgage payments directly (or through a servicing arrangement).

Most mortgages include a “Due-on-Sale” clause allowing the lender to demand full repayment if the property transfers to a new owner. While lenders rarely enforce this when payments remain current, the risk does exist. In the event of due on sale, the buyer is responsible for paying what is owed to the lender.

Payments are typically made in one of three ways: • Directly to the lender from the buyer’s account; • Through a third-party loan servicing company that automatically drafts and tracks payments; or • Via escrow arrangement managed by the closing attorney or title company. Sellers may elect to receive proof of payment each month to confirm that the mortgage remains in good standing.

To ensure the seller’s credit and property are protected: • The closing attorney handles deed transfer and confirms the mortgage status at closing. • The buyer must maintain insurance listing both buyer and seller as insured parties. • The buyer agrees to immediate re-transfer of the property if they fail to make timely payments. • The seller can receive monthly lender statements or online access for transparency.

As long as the buyer keeps the mortgage current, the seller’s credit remains intact. If the buyer were to default, the mortgage could go delinquent, which will affect the seller’s credit — that is why safeguards and verification systems are in place.

The buyer guarantees in writing to: • Keep the mortgage, taxes, and insurance current; • Maintain the property in good condition; • Carry full insurance coverage; • Comply with all local, state, and federal laws. Failure to perform allows the seller to reclaim ownership per the written contract.

All closings are conducted through a licensed real estate attorney or title company. Funds are disbursed and the deed is recorded professionally — similar to any standard real estate transaction.

The buyer covers all title, closing, and legal fees unless otherwise agreed in writing. The seller is only responsible for paying the listing agent commission.

No. This is a real property transfer handled through proper channels. The seller signs a purchase agreement, closing occurs with a licensed attorney or title company, and all disclosures are made in writing. The buyer does not charge any upfront fees, request deed transfer without closing, or make promises of mortgage modification — all of which would be red flags in a fraudulent situation.

Yes. Sellers can continue to receive online or mailed statements or request periodic proof of payments to ensure peace of mind.