Take Over My House Payments: How "Subject-To" Works (and Its Real Risks)

Maybe you owe close to what your house is worth, so a normal sale wouldn't leave enough to pay the agent and closing costs. Or you've fallen behind and the letters from the lender are getting scarier. A "Subject-To" sale is one way some homeowners get out from under a house without bringing cash to closing.

What "Subject-To" means

You sell the house and sign the deed over to the buyer, but your existing mortgage stays in place. The buyer takes the property "subject to" that loan and makes the monthly payments from then on. If you're behind, the buyer usually brings the loan current as part of the deal.

Why sellers choose it

• It can stop a foreclosure if the loan is brought current in time.
• It works even when you have little or no equity.
• You usually don't need to bring money to closing.

The risks: read these carefully

• The loan stays in your name. If the buyer misses payments, your credit takes the hit.
• Most mortgages have a "due-on-sale" clause, which gives the lender the right to demand the full balance when the house changes hands.
• Your insurance and escrow need to be set up correctly so the house stays covered.
• Texas has specific rules and disclosures for these sales. Everything must be in writing.

How to protect yourself

• Have your own real estate attorney review the contract before you sign.
• Close at a reputable title company, not a kitchen table.
• Ask for online access to the loan so you can confirm every payment is made.
• Ask the buyer how and when they plan to refinance or pay off your loan.

Subject-To isn't right for everyone. Sometimes a straight cash sale, a loan modification or even listing the house is the better move. We'll lay out every option side by side so you can decide. Call or text 832-866-FAST.