Subject to ?about the Sellers credit
A question came up at a meeting with a partner about the sellers credit. The question is when you purchase a property "subject to" , I know the loan stays in the sellers name. But what affect does this have on the seller if any if the seller applies for credit? or a loan somewhere for whatever reasons.....say to buy another house or car..
Clif 
[ Edited by pbodys on Date 04/28/2003 ]
As far as buying another house goes, my broker only needs some sort of rental Agreement drawn, some lenders might need a Hud-1 some just won't do it...it's a good idea to find someone who would be able to work with your sellers so you could set them up with someone who they would be able to get financing through
Thanks for replying, so are you saying there IS a possible drawback on the sellers side of the "subject to" purchase deal. If that's the case then what answer do you give when the seller asked the question (will I be able to obtain another loan if this loan stays in my name?) when presented with a "subject to" offer?
Clif
[ Edited by pbodys on Date 04/28/2003 ]
pbodys,
It has never been a draw back for a Seller to get a new loan for another property, even though they sell you the house 'Subject To'.
Any Mortgage Broker worth his salt can obtain financing for your Seller. You should have one on your Team by the way. He can give you a generic letter stating that a Seller can obtain financing for a new property even with an existing property loan, this letter will probably contain serveral methods.
It will eventually boil down to the Sellers FICO score and Debt to Income ratio. So the Mortgage Broker has various methods to get the loan approved depending on what the lender requires.
Keep this letter with you and if your Seller asks this question, show them the letter which will explain how this is accomplished and offer to introduce them to your Broker.
John $Cash$ Locke
I am a mortgage broker. Getting a loan for the seller because of that is never a problem. The only time the seller would run into a problem is if they let there credit go during the time of home ownership and really that is not a problem just a higher interest rate.
Carl Feathers
Mortgagefast@hotmail.com