How can I get a mortgage without it showing up on my credit report?

Question

Hello,

I own a new home free and clear that I would like to get a mortgage on. Are there any options out there that the loan will not show on my personal credit reports? What would happen if I financed it in the business name with a personal guarantee?

Thank you

Ken Williams · Answer

Thanks for the reply Jeff. Yes, the personal residence will be long term buy and hold. It is where I will be living and settling down.

I do not currently have any mortgages on anything. I need to pull some money out of an investment property to have for a down payment on my personal residence I will be buying. It was a spec home I built cash, and will be selling to the buyers this summer.

I do not want the mortgage from the investment property, which I will be using as a down payment look like a personal/owner mortgage. The reasoning behind this is that I will be holding the personal residence long term, and sell the investment this summer and would like to get the best rates possible for the long term hold.

I hope that makes sense.

Thanks

Jeff B. · Answer

I actually talked about this with my banker on Friday since I wanted a loan on a new LLC that was formed and wanted to use property in my personal name as collateral.

If you want the best rates you would want a personal mortgage.  If you want rates at about 1 point higher then you would use a business loan.  The difference for me is that I need a business loan so as to have the cash ready to jump on any deals that come my way.  There are also tax benefits through the LLC for the loan, gains, losses, expenses, and repairs or improvements that are done.

Most banks will Not even lend to you if your over leveraged either personally or through the businesses.  It's unclear if you plan on making your current residence a buy and hold property but I will assume so.  What is confusing to me is you state "I own all of my properties free and clear right now" but then you speak of having a mortgage and don't want the first mortgage to affect the second.

If you are buying and holding the first property and then buying a second to repair why you are living it and then selling it in the future and doing the same thing again then I'd buy these through the LLC and not the personal mortgage route.

Ken Williams · Answer

Yes Peter, you are right. I own all of my properties free and clear right now. Maybe this is why I am asking about the current financing situations we are looking at!!

Dawn,
You are also right. As much as it pains me, I am playing the let's be smart and find out how to get the best rates possible game!!! haha

Absolutely nothing illegal going on here DAWN!!
I actually do not own these properties, my LLCs own them, and I then own an interest in that!!! Just like in the good ol' textbooks!!

Thank you all for for your input, if you are a direct lender or have info pertaining to my situation, please PM me.

Thank you

Peter Giardini · Answer

Hey Dawn... I'm not sure I caught the drift of your post... could you a little more clear:)

Seriously, one has to ask... is it really worth it try to game the system in today's day and age?

For Ken... if I understand your situation you own one house free and clear and you want to put a mortgage on it so that you can tap the equity to use as a downpayment for a new resisdence?

If you decided to rent the free and clear property you could find a local small lender and have them put a small commercial loan (enough for the down payment) as a way to complete this transaction.

Best of luck!

Ken Williams · Answer

Yes there is a reason. I will be purchasing a new personal residence and would like to make sure the terms and interest for my personal residence are in the top tier. They have told me that with another mortgage on my report I would not qualify for the rates of a top tier loan.

The house in question is brand new, never been lived in and will eventually be sold. In the meantime, I would like to pull some money out for a good down payment on my personal residence.

Am I looking at this wrong, is there another way?

Richard J. · Answer

You've got to be kidding?  Do we never learn?  We are doomed!  History does repeat itself.  Just imagine if everyone or a large percentage of lets outsmart the system game?  This is too much!
-- Dawn

Richard J. · Answer

The right way is to wait until you can legally afford to do what you want to do, or go play in the stocks and go on margin and lose your butt with no house to walk away from. -- Dawn

Josh Green · Answer

not so easy to just get a business loan.
          
          however, a personal guarantee typically does not show up unless the business defaults.

is there a reason u are looking to keep it off ur report?

Bill Gulley · Answer

Hi, OK, spill the beans! Why would you want to do that? If you try to figure something out and you are advised to do something, and the facts are not know, you might not reach your goal, or worse, mess something up! Anything you're trying to accomplish?

You can get financing without it being reported, private lenders and as stated, guarantees, since a guarantee is a contingent liability, not a debt. Bill