Question 1

What is a subject-to real estate deal?

Accepted Answer

The buyer takes over the seller's existing mortgage payments without a new bank loan — the loan stays in the seller's name and on their credit, but the buyer takes the deed and makes the payments going forward. It's one of the few structures with no field for arrears or reinstatement in mainstream underwriting tools.

Question 2

What's the difference between arrears and reinstatement fees?

Accepted Answer

Arrears are the missed monthly payments themselves — the money the lender is actually owed to bring the loan current. Reinstatement fees are on top of that: late fees, legal fees, and other servicer charges assessed because the loan went into default. They're two separate line items because a servicer's payoff/reinstatement quote itemizes them separately, and lumping them together hides which one is driving the cost.

Question 3

How do I find out the exact arrears amount?

Accepted Answer

Request a reinstatement quote directly from the loan servicer — that figure is authoritative and should replace whatever estimate you start with here. This calculator's prefilled arrears (when a property record is attached) is a rough starting estimate from the default-to-auction window, not a servicer quote.

Question 4

Why does the entry cost show as a percentage of the property's value?

Accepted Answer

A $30,000 entry cost is a very different deal on a $90,000 house than on a $400,000 house. Expressing it as a percentage of value lets you compare subject-to deals of very different sizes on the same scale, the way a down-payment percentage does for a conventional purchase.

Question 5

Does the underlying loan's interest rate change when I take it subject-to?

Accepted Answer

No — you take over the exact payment, at the seller's exact rate, on the loan as it already exists. Any profit you build in comes from the terms of what you charge someone else (a wrap or a resale), not from marking up the underlying loan's rate.

Question 6

What happens if the deal doesn't cash-flow?

Accepted Answer

The calculator flags negative monthly cash flow as an error-level warning, not a footnote — it's exactly the kind of over-leverage that produced a real $80,000 shortfall in the research behind this tool. A negative number here means the numbers as entered don't support the deal; raise the rent assumption, lower the entry cost, or reconsider.

Question 7

Is subject-to legal?

Accepted Answer

Yes, but nearly every mortgage contains a due-on-sale clause that gives the lender the right (not an automatic obligation) to call the loan due on a transfer of title. This is a real risk that varies by lender and by state, and it's a legal question this calculator does not resolve — talk to a real-estate attorney before closing a subject-to deal.

Subject-To Calculator