Is anyone familiar with buying a project subject to?

Asked by Ann Du, Austin, TX Sat Aug 23, 2008

Any experts in these types of transactions in Austin?

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Bruce Lynn, Agent, Coppell, TX
Sun Aug 24, 2008
Be very careful doing these types of transaction as they are risky. For years the real estate gurus would tell you this is a good risk free way to acquire property without using your credit. The risk to you is the "due on sale" clause in the original "owner occupied" mortgage. People would always tell you that the banks would never call the loan as long as it was being paid timely. However due to the risk the banks take with these types of properties they have started calling and foreclosing on some of these homes even when the mortgage is current. That's your risk....if you do any repairs or pay any taxes or insurance that money is at risk.
Web Reference:  http://www.teamlynn.com
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Josh Thomas, , Austin, TX
Sat Aug 23, 2008
This means that you take over the other person's loan. While it is technically possible, many lending companies do not allow it, because it cuts them out of the chance to adjust the interest rate to today's market value vs. whatever it was set at when the property was purchased. As with anything in real estate, it is negotiable. However, not very common or popular in my opinion.
Web Reference:  http://www.dealoftheweek.org
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