Purchase property in my name then move to LLC

Purchase property in my name then move to LLC

Bowie, MD · Member since 2016 · 38 posts · 2 votes

If I have a mortgage in my name and want to move it to my LLC. How would one go about doing so to keep the mortgages in my name low?

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  • Orlando, FL · Member since 2016 · 69 posts · 11 votes
    10y

    Hi @Trevor Sie-Duke, I have the same question, thanks for posted it. 

  • Title Representative · Richardson, TX · Member since 2016 · 9 posts · 10 votes
    10y

    Let' s be certain you you are asking the right question.  A mortgage is a security interest granted by the Buyer/Owner (Mortgagor) to the lender (Mortgagee), which established a lien against real property, and secures payment of the Note. A Warranty Deed is an instrument used to convey title to real property from the Owner (Grantor) to the Buyer (Grantee).  

    If you took title to real property by Warranty Deed in your individual name, you can further convey that real property, again by Warranty Deed, to your limited liability company. The conveyance should be made "subject to" the Note and Mortgage, which should be described in the instrument. Regardless of the conveyance to the LLC, you will remain personally liable to the lender for payment of the Note, and for complying with the terms and conditions in the Mortgage.

    Most Mortgages contain a "due on sale" clause, allowing the lender to call the entire outstanding principal amount due within 30 days upon a sale of the property secured by the mortgage. However (1) lenders seldom enforce the "due on sale" clause as long as the Note remains current, and (2) lenders generally don't consider a sale to an entity owned by the Mortgagor to be a sale in the strict sense of the term.

    You really should have a local attorney you can meet with.

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