What Is “Subject-To” Financing?

Subject-to financing is a type of real estate transaction in which the seller agrees to allow the buyer to take over the existing mortgage on the property, rather than having the buyer obtain their own financing. This type of transaction takes place when the seller is behind on payments, or has little or no equity in the home. When a transaction like this takes place, the buyer assumes responsibility for the existing loan with all its terms and conditions intact.

Advantages of Subject-To Financing

One of the biggest advantages of subject-to financing is that it allows a sale to move forward without having to wait on approval from banks and lenders. The process moves much more quickly because there are no delays due to third parties. It also simplifies matters as both parties can agree on one set of terms instead of two separate sets (the buyer’s loan agreement and the seller’s mortgage). Additionally, this type of transaction eliminates closing costs, which helps keep costs low for both parties involved.

Another advantage is that these types of transactions are beneficial for sellers who are looking for quick cash. For example, even though the seller may be behind on their payments, or have a limited amount of equity in the home, the buyers oftentimes will pay the seller a cash payment in exchange for them agreeing to the sell of the home with subject-to financing.


Selling your home using “subject-to” financing has many advantages—it moves quickly without involving third parties; eliminates closing costs; and offers sellers immediate cash upon sale—making it an attractive option for those looking to sell their homes quickly and easily. If you’re interested in selling your home using this method, make sure you understand all aspects before committing so you can make an informed decision about whether this option makes sense for your situation.

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