Subject-To
A subject-to sale transfers ownership to a buyer while the seller's existing mortgage stays in the seller's name and continues to be paid by the buyer — title passes "subject to" the existing loan rather than new financing.
No lender approval or qualification is involved in the transfer itself. The buyer typically makes payments directly to the servicer or through a servicing arrangement, but the loan is never legally assumed or refinanced into the buyer's name.
Because the seller's name and credit remain tied to the loan, a subject-to sale relies on the lender not exercising its due-on-sale clause — a real, disclosed risk, and one reason these deals are typically documented and reviewed by a real estate attorney rather than handled informally.
Subject-to can be a fast way to exit a property, especially one with a low, assumable-feeling rate or one that's hard to finance conventionally, but a seller should fully understand that their credit and legal exposure on the underlying loan don't disappear at closing. Get independent legal advice before agreeing to this structure.
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