How to deed property to LLC without cancelling mortgage?

Question

I called my mortgage, and my contract says that transfering my deed will mean I'm required to pay the entire balance which I cannot.

Do you know anyone who can?

Is therr any taxation on COO or reset on prop. Taxes?

I thought REI were doing that easily all the time with a quit claim deed?

Please help

Tim Hendricks · Answer

@Nadine Lajoie Most mortgages have a due on sale clause. Transferring the property from your name personally to an LLC, even if wholly owned, would trigger that clause.

That being said, many people do move a property after purchase to an LLC. The general thinking is that as long as you are paying your mortgage each month it's unlikely that a lender will become aware of the transfer or take any action to force the issue. Most mortgages also have a right to cure - so if you do get "caught" you can move to home back to your name without having to pay off the mortgage.

I would speak to a RE attorney in your state and have her/him review your mortgage.

Lastly, what are you trying to achieve with the LLC transfer? Buying an umbrella liability policy will likely provide you with better protection for less money and hassle, at least until the time where your equity position in the home gets more significant.

How to deed property to LLC without cancelling mortgage?

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