Subject-To, Explained Plainly.

'Subject-To' means the property is sold subject to the existing loan. The deed transfers to the buyer, but the mortgage stays in the seller's name. The buyer — in this case, USPB Group — takes over making the monthly payments.

No new loan is created, which is why these deals can move quickly and why they work even when a property has little equity or wouldn't qualify a buyer for traditional financing.

Subject-To often fits sellers with little or no equity, where a traditional sale would leave them writing a check at closing. It can fit owners behind on payments who need relief fast, and owners with a low interest rate that a buyer would love to preserve.

It generally does not fit sellers with substantial equity who want all their cash out at closing — a cash purchase or traditional sale usually serves them better.

Because the loan stays in your name, your credit depends on the buyer making the payments. That's why who you sell to matters more in a Subject-To deal than in any other kind. You should understand the due-on-sale clause too: most mortgages technically allow the lender to call the loan due when the property transfers. In practice lenders rarely do when payments are current, but it is a real possibility you should weigh.

We explain all of this before you sign anything, and we encourage you to review the documents with your own attorney or advisor. A Subject-To sale should never be something you agreed to without understanding it.