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How You Can Buy A Home Subject To The Extisting Mortgage
Buying 'Subject To'
August 1, 2017
There are many creative ways that investors can help homeowners that may have a need to sell their property quickly. Today, we will be discussing the 'TOPS' method or Taking Over Payments System.
This is a method that the buyer purchases the property while leaving the existing financing in place. This is a fairly common practice with investors, but not well known to the public in general. Let me explain a bit how it works.
There are a few scenarios that a seller may want to consider this option. One would be if they are behind on their payments or about to be behind and they know they will not be able to catch up. As an investor, you can step in and either catch the payments up and make them current or simply take over starting at the agreed time. Remember, you are not taking over the mortgage, just the payments. This could really be beneficial to the seller, as they will get the benefit of the mortgage being paid each month by the investor. This will reflect in their credit being stabilized and also they avoid having a foreclosure on their record.
Now, depending on the investors' strategy, the seller will continue to benefit from the payments being made on time, but how does the mortgage get paid off? Well, the investor may choose to do a lease option on the property to an end user. So the investor buys the property from the seller, takes over payments, but then leases it to someone who will eventually purchase it within a specified time frame. Once that person makes the purchase, the original mortgage gets paid in full, the original seller and investor both walk away.
There are some distinct advantages to the investor as well. For one, they are not using their credit to make the purchase, imagine how many homes you could buy if credit wasn't an issue! There is no loan to qualify for and that means we can get the transaction done quickly too and start earning money. Another benefit is not having to use any of our cash to purchase a home, you are simply Taking Over Payments. So no cash out of pocket, no credit checks and no loans to qualify for.
Win, Win Win for all parties.
The Bank ~ continues to receive payments and doesn't have to foreclose
The Seller~ gets a quick sale and doesn't have to pay fees or commissions
~ gets the benefit of preserving their credit as the buyer is making the payments
The Investor~ gets to control a property quickly
~ also gets credit benefits as they do not have to use theirs to make purchase
~ does not have to qualify for a loan
If you or someone you know is in a situation that would benefit from having an investor buyer help them, please let us know. Real estate agents should be able to help their neighbors and community by more than simply putting a sign in the yard and hoping it all works out. My team and I have the knowledge, resources, and experience to help. Please contact us for assistance with questions about inherited homes, abandoned homes, homes that need major repairs, or if you are a landlord that is tired of dealing with tenants and broken toilets.
You can submit your property to our website and someone on our team will contact you to discuss possible options and if your home is a good candidate for the TOPS program. If not, there still may be other solutions to your situation. Start here SquareFeetOrlando.com
Shawn McCormick is a licensed Realtor® in Florida and also owns Square Feet Orlando, a private real estate investment company that purchases homes nationwide.
Feel Free to reach out at any time to buy or sell retail or if you have a special need (probate, foreclosure, health issues, tired of being a landlord, Divorcing etc)
SHAWN.PREFERREDREBROKERS.COM (retail buyers/sellers)