Updated over 7 years ago on . Most recent reply
LLC on title, with personal mortgage
Hello,
We are buying our first rental property, a small townhome, and I am confused about how to best protect ourselves from tenant suits. My understanding is it's best to set up an LLC but we would not qualify for a mortgage as an LLC. Also it would have to be a commercial mortgage which has higher rates and seems kind of crazy since the mortgage amount is only 150k.
I was reading that maybe we could do a quitclaim after settling to change the title to the LLC and keep the mortgage as a personal mortgage. Is that something we can do? Do we need to ask the lender for permission? Or is it ok as long as we are listed as the presidents of the LLC? Also how does this effect our landlord insurance? Would we need to change the landlord insurance to the LLC? That would most definitely inform the mortgage company that the title changed names.
Should we just keep everything under our names and get an umbrella policy instead? Thank you so much for your help.