How creative finance works, in plain English
Creative finance means we build a house purchase around your situation instead of a bank's checklist. We use three tools: Subject-To, seller finance and lease options. We never use wraparound mortgages, and we explain the risks of each one before you sign anything.
What does Subject-To mean?
"Subject-To" is short for buying a house subject to the existing mortgage. Your loan stays exactly where it is. You sign the house over to us, and we take over making the monthly payments on the loan.
It is a lawful way to buy a house. It also has a real risk that you should hear from us first. Most mortgages contain a due-on-sale clause, which gives the lender the right to call the whole loan due when the house changes hands. We cannot promise how a lender will act. We tell you about it before anything is signed, and we suggest you ask your own attorney as well.
What is seller finance?
With seller finance, you act a bit like the bank. We buy the house, and instead of paying you in one lump at closing, we pay you over time under terms we agree on together. The agreement is written down, and it is secured by the house.
This can suit an owner who has a lot of equity or owns the house free and clear, and who would rather receive steady payments than a single sum. The risk to you is that you depend on us to keep paying. We put the terms in writing, and we encourage you to have an attorney read them.
What is a lease option?
A lease option is a lease with an agreed right to buy the house later. We lease the property for an agreed period, and at the end we may choose to buy it on terms set at the start.
It gives both sides time. You keep ownership during the lease, which means you also keep certain responsibilities, depending on what the agreement says. If we do not buy at the end, the house stays yours.
Why does Marcus Property Group never use wraps?
A wraparound mortgage puts a new loan on top of the old one, with payments flowing through a second set of papers. We do not do them. Our deals stay simple: one existing loan with Subject-To, or terms written directly between us and the seller. Fewer layers means fewer places for confusion.
When is this not the right fit?
We would rather tell you now than waste your time.
Creative finance may fit when
- You want to be out of the house and the payment.
- You can wait for money over time, or do not need a lump sum.
- You are comfortable with the loan staying in your name for a time.
- You are open to having an attorney read the papers.
It may not fit when
- You need a large lump sum on closing day that the terms cannot provide.
- You cannot accept any risk from a lender's due-on-sale clause.
- You have time and money to repair the house and want the widest open-market sale. A listing with an agent may serve you better.
- You would prefer to keep the house and need a repayment plan.
Questions about the terms
More on the full FAQ.
Is buying a house Subject-To legal?
Buying a house subject to an existing mortgage is a lawful transaction. The risk is contractual. Most mortgages contain a due-on-sale clause that gives the lender the right to call the loan due. We explain this before you sign and cannot promise how a lender will act.
Will the loan still be in my name?
In a Subject-To deal, yes. The loan stays in the seller's name until it is paid off or refinanced, even though we make the payments. We explain what that means for your credit and your insurance.
Do you use wraparound mortgages?
No. Marcus Property Group never uses wraparound mortgages.
Want to see which one fits your house?
Send us the basics. We will walk through the options with you and tell you honestly which one fits, or if none does.