Not quite sure what you are asking with lender’s points???
When I take a property “subject to” the existing financing, there is no lender participation. The seller is deeding me the property and the loan is staying in their name. Usually I will then immediately record the deed transferring ownership to me/entity.
Depending upon what state you live in, there may be a real property transfer tax (RPTT) which must be paid at the time of recording.
When I assume the financing in place. Don't I need to clear it with the lender first? Though it is highly unlikely that DOS clause will be enforced - I heard that he will tell me that a higher interest rate is in order with my assumption and then charge me a fee for the transaction.
John, when you take your deeds subject to. Is it through a land trust whereby you pay the owner- who pays the lender?
Sorry for the multiple questions. It's just that, I have read many of your posts and you give great insight!
it sounds to me like your mixing 2 techniques together.
on a short sale you have to contact the lender to determine how much they will take etc.
but if i understand the "sub-to" process correctly you have no contact with the lender to complete the deal. unless it's to get a statment to get the real numbers on the prpperty that the seller may be a little fuzzy on. but you can get the deed(quit-claim or otherwise) from the current owner without ever dealing with the bank.
i then had the seller give the bank permission to dicuss the account with me(in case something comes up) they just told the bank i was there power of attorney.
i filed the quit claim with the county the property was in and that was it.
the county does not inform the bank of such filings. and if you are power of attorney for that property it is not strange to the bank to receive checks with your name on it.(i usually set up auto pay via internet or send a cashiers check though.
the only fee i ever paid was the filing fee & tax required by the county court house for processing those documents.
Hi thanks for the reply!
What you and John are saying makes total sense to me.
Here is the excerpt of what I read, which prompted me to post this topic:
"If we successfuly take over the property by having Terri sign the deed and then we record the deed, we may discover that the lender begins foreclosure on us even though we've made up the back payments and penalties!.....Therefore, before we go through any of this we will want to chek with the lender to see that we can safely assume the existing financing (Sometimes the lender will charge us points, or a fee, plus a higher interest rate for assumption.)"
First never take over a property with a Quit Claim Deed, this only tranfers and interest in the property, so you could have others who have one or get one later, then you have partners you did not know about.
Use a Grant Bargain and Sale Deed aka Warranty Deed or other State Specific device to transfer "all" interest in the property to you.
With the Subject To method of investing you are 'not' I repeat 'not' taking over the loan or assuming the loan, the loan stays in place.
You will pay a transfer tax to the County you live in for recording the Deed this amount varies by the municipality where the Deed is recorded.
You should use a 3rd party Loan Servicing Compay to collect payments from your buyer and make payments to the lender. You have no contact with the lender or note holder until your buyer re-finances, which in what I teach is about 2 years.
There seems to be a confusion in mixing and matching investing methods here, the true Subject To deal is where the loan stays in place and you get the benefits of using the existing financing to sell the property. You also get the Deed to the property so you have control of the property and take title to the property.
I guess this post is too vague...
When transferring a title to my name by assuming the financing (subject to) in place, lenders sometimes will charge points and a higher interest rate.
My questions are:
1.) Can anyone give me their approach that they have used in the past to negotiate?
2.) Is it a worthy risk to not record the deed and assume the financing?
Thanks,
Vis
Hi Vis,
Not quite sure what you are asking with lender’s points???
When I take a property “subject to” the existing financing, there is no lender participation. The seller is deeding me the property and the loan is staying in their name. Usually I will then immediately record the deed transferring ownership to me/entity.
Depending upon what state you live in, there may be a real property transfer tax (RPTT) which must be paid at the time of recording.
Hope this helps
John (LV)
Hi John,
Thank you for the quick reply. I appreciate it.
When I assume the financing in place. Don't I need to clear it with the lender first? Though it is highly unlikely that DOS clause will be enforced - I heard that he will tell me that a higher interest rate is in order with my assumption and then charge me a fee for the transaction.
John, when you take your deeds subject to. Is it through a land trust whereby you pay the owner- who pays the lender?
Sorry for the multiple questions. It's just that, I have read many of your posts and you give great insight!
Thanks
-Vis
Greetings,
it sounds to me like your mixing 2 techniques together.
on a short sale you have to contact the lender to determine how much they will take etc.
but if i understand the "sub-to" process correctly you have no contact with the lender to complete the deal. unless it's to get a statment to get the real numbers on the prpperty that the seller may be a little fuzzy on. but you can get the deed(quit-claim or otherwise) from the current owner without ever dealing with the bank.
i then had the seller give the bank permission to dicuss the account with me(in case something comes up) they just told the bank i was there power of attorney.
i filed the quit claim with the county the property was in and that was it.
the county does not inform the bank of such filings. and if you are power of attorney for that property it is not strange to the bank to receive checks with your name on it.(i usually set up auto pay via internet or send a cashiers check though.
the only fee i ever paid was the filing fee & tax required by the county court house for processing those documents.
hope this helps
AB
[addsig]
Hi thanks for the reply!
What you and John are saying makes total sense to me.
Here is the excerpt of what I read, which prompted me to post this topic:
"If we successfuly take over the property by having Terri sign the deed and then we record the deed, we may discover that the lender begins foreclosure on us even though we've made up the back payments and penalties!.....Therefore, before we go through any of this we will want to chek with the lender to see that we can safely assume the existing financing (Sometimes the lender will charge us points, or a fee, plus a higher interest rate for assumption.)"
Any comments?
Regards,
Vis
Visualized,
Vis the do's and dont's:
First never take over a property with a Quit Claim Deed, this only tranfers and interest in the property, so you could have others who have one or get one later, then you have partners you did not know about.
Use a Grant Bargain and Sale Deed aka Warranty Deed or other State Specific device to transfer "all" interest in the property to you.
With the Subject To method of investing you are 'not' I repeat 'not' taking over the loan or assuming the loan, the loan stays in place.
You will pay a transfer tax to the County you live in for recording the Deed this amount varies by the municipality where the Deed is recorded.
You should use a 3rd party Loan Servicing Compay to collect payments from your buyer and make payments to the lender. You have no contact with the lender or note holder until your buyer re-finances, which in what I teach is about 2 years.
There seems to be a confusion in mixing and matching investing methods here, the true Subject To deal is where the loan stays in place and you get the benefits of using the existing financing to sell the property. You also get the Deed to the property so you have control of the property and take title to the property.
John $Cash$ Locke