Questions to Ask If You're Selling Your Home Subject-To the Existing Financing

If you're thinking about selling your home subject-to the existing financing, you’re entering a unique and creative realm of real estate. This method can benefit both buyer and seller — but only if you ask the right questions upfront. Here’s what you need to consider before moving forward with this kind of deal:

1. Who Will the Deed and Mortgage Be Under?

In a subject-to transaction, the deed transfers to the buyer, but the mortgage stays in your name. That means the buyer becomes the legal owner of the home, but the loan remains your responsibility in the eyes of the lender.

Why this matters: You’re still financially tied to the property, even though you no longer own it. Make sure you understand this risk and are confident in the buyer's ability to keep up with the payments.

2. How Do I Get a New Mortgage If the Old One Is Still On My DTI?

Even though you’ve sold the house, the mortgage still appears on your credit report and counts against your debt-to-income ratio (DTI). That can make it tough to qualify for a new loan.

What to ask your lender or mortgage broker:

• Are there lenders who are more familiar with subject-to situations?

• Can the buyer’s payment history on the subject-to loan be used to offset your DTI?

• Will a lease agreement or purchase contract help your case when applying for a new loan?

This part often requires documentation and careful explanation — but it’s not impossible.

3. Who Keeps the Insurance?

Technically, the new owner (buyer) should carry a new homeowner’s insurance policy in their name. However, your mortgage lender still expects the home to be insured, because their loan is still tied to it.

Smart move: Require the buyer to:

• List your name (or your mortgage company) as an “additional insured” or “interested party”

• Provide proof of coverage with the proper terms and amounts

• Maintain a policy that aligns with the lender’s minimum requirements

This protects both parties if damage or disaster strikes.

4. How Am I Protected If the Buyer Defaults on Payments?

This is a huge concern — and rightfully so. Since the mortgage is still in your name, any missed payments can hurt your credit and even lead to foreclosure.

Ways to protect yourself:

• Use a third-party loan servicing company to handle monthly payments and provide documentation

• Draft a detailed contract with default clauses, timelines, and remedies (preferably with legal help)

• Agreement or Deed

• Stay informed — make sure you receive monthly statements or payment confirmations

Don't just rely on trust. Build legal and logistical safeguards.

5. What Happens to My Credit If Something Goes Wrong?

The short answer: it can take a hit.

Even though you sold the home, the loan is still yours. If payments are missed or the buyer walks away, your credit score could drop — and you may be stuck with late fees, collections, or worse.

Pro tip: Some sellers negotiate a backup clause — for example, the right to reclaim the property through a deed-in-lieu if the buyer defaults. Others keep communication open with the lender to stay in the loop.

Either way, make sure your exit plan accounts for worst-case scenarios.

Selling a home subject-to existing financing isn’t your everyday real estate deal — but it can be a powerful tool when used correctly. The key is asking the right questions, getting professional advice, and protecting yourself at every step.

If you’re even considering this route, talk to a real estate attorney, experienced investor, or title company familiar with creative financing. The deal may be unconventional — but your peace of mind shouldn't be.

Need Guidance with a Subject-To Sale? Let Happy Home Savers Help.

At Happy Home Savers, we specialize in creative solutions that make selling your home easier — and safer. Whether you're navigating a subject-to deal for the first time or need help protecting your credit, our team is here to guide you every step of the way.

📞 Reach out today for a free consultation, and let’s talk about your options with zero pressure and real clarity.

👉 Visit us at happyhomesavers.com
📧 Or email us directly: smile@happyhomesavers.com

Your home, your equity, your peace of mind — protected.