Sub 2 Question? Pay Down Mortgage
Hello,
Say a deal is worked out you have deed and take over payments. Mortgage is still in the other person's name. Can u the pay down the whole mortgage and then just get your own for say more money?
Yes. As soon as the other mortgage is paid off, you would own the property free and clear. If you wanted to refinance the other mortgage you could do that too. Cash outs on an investment property could be difficult, though if you don't mind a high interest rate, and the LTV is good, you should be able to find a lender.
Good luck and happy investing
I agree with WeBuy...
There should be no problem with paying down the mortgage. However, you plan to do a cash-out refi later, some lenders can be strict on the amount of cash-out you can get. Send me a private message or an email (see my profile for email address) if you need a lending source.
Is there a reason to pay it down, rather then let the renters do it? The nice thing about subject to is to use thier loan as long as you can. If you have the cash in pocket to pay it down, why would you want to finance it, and pay closing costs? Just use the cash in hand for whatever you want.
Quote:
On 2003-08-02 01:39, webuyproperties wrote:
Yes. As soon as the other mortgage is paid off, you would own the property free and clear. If you wanted to refinance the other mortgage you could do that too. Cash outs on an investment property could be difficult, though if you don't mind a high interest rate, and the LTV is good, you should be able to find a lender.
Good luck and happy investing
If you're thinking about Investing in TEXAS beware!! Cash Outs are nearly impossible due to Texas Law. Don't get me wrong, there is $$ to be made. And, ways to get your cash out... Just follow John $Cash$ and others on this site to pick-up the bread crumbs of knowledge on how to be CREATIVE...
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victorb says it right! Why use your money (you'd have to pay fees, etc. to new lender) when you can use someone elses money? Of course, it does depend on the rate at which the S2 loan was made.
The attractive feature of the Subject To deal are the “terms” (24-36 months, existing mortgage interest rate, ownership control, no credit qualifying, no closing costs, future appreciation/equity, etc.) which can be negotiated. I have learned over the years that “Terms” will out run price if negotiated properly.
If the mortgage is already in place and the agreed terms benefit the investor, the exit strategy should have been considered/established during the original negotiation with the seller. Maximizing ALL the profit sources in a Subject To should be the goal otherwise another investing toolkit technique (owner financing, lease option, assignment, buying outright, Bird dog, etc.) should be used by the investor.
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