subject to existing financing and Assumption of a mortgage

I'm interested in hearing everyone's answers on this topic. They sure do sound the same. I've come across ads where people say "just take over payments" or "assume loan". I've heard of a "mortgage assignment" strategy where some investors send the bank a letter and ask them if they mind someone else making the payments. I've never done this myself, but it sounds reasonable that the banks wouldn't claim there was a breach of contract as long as they get paid somehow.

long topic for discussion. TRUE assumable loans have left the mainstream of residential real estate back in the Eighties. However, creative investors have been buying houses "subject to" ever since. The basic reason is that it is a low cost entry into owning real estate. There are some risks (such as the due on sale clause), but usually the banks don't accelerate the loans as long as the mortgage is being paid AND you don't aggressively point out the fact you assumed the mortgage without their permission. However, it is a risk you should be aware of in this economic climate.

The pros and cons and the mechanics of how to do it is the fodder of many RE gurus. Some talk about using land trusts, some talk about using LLCs and some others talk about using complex multi-layered processes. They all have their benefits and their drawbacks. Doing a "subject to" is easy. Doing a "subject to" correctly takes a little forethought and planning.