Want to put mortgage on my property owned by an LLC, How??
I have a rental property that I paid cash to purchase and rehab and now have tenants in the property. I want to refinance out and get a 1st mortgage on the property. I also want to put the property in the name of an LLC to protect my personal assets from any liability. Do I get the mortgage in my name personally and then form the LLC to put the property in? And if I do that, by changing the ownership of the house, aren't I in default of the loan? Just trying to figure out how to do this right, any help would be greatly appreciated...
You have two options.
1) Get a mortgage on the property in your name. Form an LLC and quit
claim to property from your name to the LLC. Most banks will not
have a problem with this if you are the sole owner of the LLC (spouse
is ok). The key is to discuss it with the bank before obtaining a
mortgage to be sure there is no problem. I have done this several
times without a problem.
2) Transfer the property to the LLC and then obtain a mortgage. You will
have to sign personally for the loan. I have done this as well with little trouble. There are a few more hoops to jump through and you will need additional documentation.
The key is disclosure. Better to be open from the start to avoid problems later.
8)