Posted on: 23rd Apr, 2009 09:26 am
Hi There,
I am considering the purchase of a second home. I would want to home this home in an LLC to get protection in case I ever ran into legal problems. Most lenders are not interested in lending to an LLC, or if they will, they would do so at very high rates.
I am considering closing adn getting a mortgage in my name. Later, I would then Quit Claim it to an LLC I have created. My Questions/Concerns are, if I do this I believe the lender could claim the loan as invalid and demand immediate repayment. From a practical standpoint; would the lender be informed of this quit claim ? How often does the lender actually take action ? I thought this has been done frequently to move real estate into LLCs ?
Andy
I am considering the purchase of a second home. I would want to home this home in an LLC to get protection in case I ever ran into legal problems. Most lenders are not interested in lending to an LLC, or if they will, they would do so at very high rates.
I am considering closing adn getting a mortgage in my name. Later, I would then Quit Claim it to an LLC I have created. My Questions/Concerns are, if I do this I believe the lender could claim the loan as invalid and demand immediate repayment. From a practical standpoint; would the lender be informed of this quit claim ? How often does the lender actually take action ? I thought this has been done frequently to move real estate into LLCs ?
Andy
Hi Guest,
If you get the loan in your name and then transfer the title to the LLC, the lender may call the loan amount due because of a due-on-sale clause in the loan agreement. I'm not sure whether you can hide the transfer from them. But when they will come to know about it, they will demand their money. I think you should consult a lawyer to find out if there is any way you can transfer property to the LLC and at the same time, be able to finance it.
If you get the loan in your name and then transfer the title to the LLC, the lender may call the loan amount due because of a due-on-sale clause in the loan agreement. I'm not sure whether you can hide the transfer from them. But when they will come to know about it, they will demand their money. I think you should consult a lawyer to find out if there is any way you can transfer property to the LLC and at the same time, be able to finance it.