What is Subject-To in Real Estate?
If you're a homeowner struggling with mortgage payments or facing a situation where selling traditionally isn’t working, Subject-To might be a solution worth considering. This creative financing strategy allows a buyer to take over the payments on your existing mortgage, without the need for a new loan or bank approval.
Instead of going through the typical home-selling process, you can transfer ownership while the mortgage stays in your name. The buyer continues making payments, preventing foreclosure, preserving your credit, and giving you a way to move on often times with some cash in your pocket.
How Does Subject-To Work?
Let’s break it down with a real life scenario:
Paige S. owned a $250,000 home with a $225,000 mortgage balance, meaning she had about $25,000 in equity. Due to an unexpected medical procedure she had fallen behind on her mortgage payments and needed a way to sell quickly and easily without sinking money into repairs or waiting for a buyer.
She considered selling traditionally, but agent commissions, closing costs, and necessary repairs would have cost around $22,500 (9% of the home’s value)—which meant that after everything, she’d walk away with little to nothing. She wanted a solution that would allow her to get ahead financially without the hassle of a long, expensive sale.
That’s when Paige decided to answer one of our letters and call us for an offer.
After speaking with Paige and understanding her situation, we carefully reviewed the best options for her and put together a plan that made sense for both sides.
Here’s what we did:
✔ Caught up her past-due mortgage payments – Paige was behind by $3,500, which put her at risk of foreclosure. We covered the outstanding balance, bringing her loan current and protecting her credit from further damage.
✔ Provided a cash payout for her equity – If Paige had sold traditionally, closing costs and agent fees would have left her with little to nothing. Instead, we gave her $7,500 in cash, giving her the flexibility to relocate and cover moving expenses without stress.
✔ Took over the mortgage payments – With the loan now in good standing, True Start Homes took full responsibility for making future payments on her $225,000 mortgage, ensuring she no longer had to worry about the financial burden of the home.
✔ Helped protect her ability to buy another home – Since the mortgage remained in her name, Paige wanted to be sure it wouldn’t prevent her from qualifying for a new home in the future. We provided official documentation showing that True Start Homes had taken over the payments, which her lender could use to offset the debt from her financial records when she was ready to buy again.
By structuring the deal this way, Paige was able to walk away with cash in hand, her mortgage off her plate, and the freedom to move on with confidence—all without the stress and delays of a traditional home sale.
The Outcome
Instead of dealing with months of showings, agents, price reductions, low-cash offers, contractors, repairs, banks, and closing costs, Paige was able to:
Sell her home quickly without the stress of a traditional sale
Walk away with $7,500 in cash, instead of nothing
Avoid foreclosure and protect her credit
Ensure her mortgage payments were taken care of, without worrying about late fees or penalties
Get the documentation she needed to qualify for another home in the future
Meanwhile, we took over ownership, continued making the payments, and ensured the property was well-maintained.
For Paige, this was a practical and fair solution. She was able to settle her financial obligations, receive cash for her equity, and move on without the burden of her mortgage. For us at True Start Homes, it was a great opportunity to invest in a home while ensuring payments continued on time.
That’s what we strive for—a win-win approach where homeowners get the relief and tools they need for their next chapter, and we take on a property we make the most of.
Who is Subject-To Best For?
Not every seller will be a fit for a Subject-To sale, but it can be a great solution for:
Homeowners behind on payments who need immediate relief from their mortgage
Sellers with little to no equity who can’t afford to sell through an agent
People facing foreclosure who want to avoid the long-term damage to their credit
Owners struggling to sell in a slow market or without enough funds to cover repairs
This type of sale offers speed and flexibility, often closing in days instead of months.
Is Subject-To Right for You?
If you’re struggling to sell, facing foreclosure, or just need a fast, stress-free way to move on from your home, a Subject-To sale could be an option worth exploring.
At True Start Homes, we take a transparent, no-pressure approach to every deal. If it’s not the right fit for you, we’ll tell you. But if a Subject-To sale can help you move forward, we’ll walk you through every step of the process.