Editing 1course Real Estate (section)

==== Subject-To Financing Basics ====
Understanding how financing works in Subject-To deals is essential for making informed decisions. Here’s a breakdown of the basics:

# '''Taking Over Existing Mortgages:'''
#* '''Assumption of Payments:''' In a Subject-To deal, you take over the existing mortgage payments while the loan remains in the seller’s name. This allows you to acquire properties without needing new financing.
#* '''No New Loan:''' Since you’re not applying for a new loan, there’s no need for credit checks or lengthy approval processes. This makes Subject-To investing faster and more accessible.
# '''Advantages of Subject-To Financing:'''
#* '''Lower Entry Costs:''' Avoid large down payments and closing costs associated with traditional financing.
#* '''Favorable Loan Terms:''' Benefit from the existing mortgage’s terms, such as lower interest rates and fixed payments.
#* '''Increased Buying Power:''' Acquire more properties by leveraging existing mortgages without needing additional capital.
# '''Potential Challenges:'''
#* '''Due-On-Sale Clause:''' Understand the risks associated with the due-on-sale clause, which allows lenders to demand full repayment if the property is sold. Have strategies in place to address this risk.
#* '''Seller’s Credit:''' Ensure that you make timely mortgage payments to protect the seller’s credit and maintain trust.