Great video! You have a way of explaining things that makes them so easy to understand. New subscriber :) How simple and costly is it to transfer the title back to your name for refinancing and then back to an LLC? Furthermore, given the current high interest rates, would it be advisable to wait to refinance to a lower interest rate before transferring ownership to an LLC?
Thanks for the kind words and for subscribing! 😁 It's very simple to transfer title. You just need to execute a deed in front of a notary and record it with the county. Voila... title transfer complete! The cost is tougher to say, as that varies locally. In most places, the cost will be quite low -- you might pay a small fee to the notary and then recording fees to the county. There are, however, some instances when "transfer taxes" are due if you transfer ownership. So definitely look into those before making a transfer. Washington State and most cities charge an "excise tax" when real estate is sold -- usually between 1.5% and 2% of the price. BUT when I transferred title to a rental from my name to my LLC (and back), I was able to fill in an affidavit and qualify for a waiver. Call your county's recorder's office to find out more for your local area. Also, your loan servicer may charge a small fee to process your request and grant permission for the transfer. One of my clients was charged $100 recently. If you put title in the name of an LLC, you'll have to transfer it back to your name in order to refinance (generally the transfer has to happen before the application date). If there's no transfer tax in play and the transfer is only $100 to $300, you can just flip title back and forth, as needed. When you're ready to refinance, please reach out. I'd be happy to help with your new loan! Hope that helps!
I fund this video and contacted my lender right away to stop him from using my LLC for the mortgage and switch to Fannie Mae. Right on time! Thank you so much. You earned that thumbs up, and I just subscribe. Amazing, this was the first video that I watched from you. :)
Excellent video. Pls don't make deed changes without consulting an attorney and don't let a cpa or enrolled agent form your llc. Make sure an attorney does it. It's not that much more expensive if you hire the right attorney.
Thanks Michael! And that's good advice... my partner and I have an attorney form our LLCs and handle the annual filing with the state for each. It doesn't (as you point out) cost all that much and there's peace of mind knowing that it's all been done correctly and can serve it's intended purposes should something happen where you really want that liability protection!
Great video, thank you for sharing! Would Fannie Mae still allow for a transfer if one of the units in the property is owner-occupied? To give some context, the LLC would be under my name (just like the mortgage) and I would stay in the unit for one year after closing on the loan. Thank you!
You're welcome, Bruno! I'm happy you found the video helpful. And yes, Fannie's rules don't specify anything with regard to occupancy. So you should be able to secure permission to transfer title to a an LLC even if you are living in the property. I've had a few clients do this, either because they were living in a multi-family property or because they were renting part of their home through AirBNB and wanted a little extra liability protection. Are you in the market for a property or is this a home you already own? If you're in the market for a property, I'd love to chat and help you explore mortgage options that'll allow you to use this guideline to your advantage after you close. Feel free to reach out to me any time at juleef@rate.com or 503-799-3711. 😁
You're welcome! 😊 I am happy I was able to offer some clarity around this subject. It's definitely a source of a lot of questions in my lending practice.
Thank you for taking the time to make this video and share your knowledge -truly appreciate it! If one, meets all the requirements and formally requests a Fannie Mae servicer to transfer the title into an LLC, can the servicer deny the request even though it's in the servicing guidelines? We're in the process of obtaining a loan on a home in NC, per our lawyer it would be easier and more cost-effective to do so at closing however our broker is stating that lenders do not "like" doing so. Most likely, they will be selling the loan right after we close on the house and don't want to deal with the LLC aspect of it. Understandable. However, once we actually have a longer-term servicer in place and the loan is in good standing, can a servicer still deny the right to transfer ? Thank you again and subscribed 🙂
You're welcome, Sarah. I'm happy you found the video helpful! 😊 Just transferring title right after closing still runs the risk of triggering a due on sale clause, as you won't have gone through the proper channels. So the best practice is to wait for servicing to settle in and request permission to make the transfer from your servicer. The Fannie Mae Servicing guide uses the word "must" when instructing sellers to approve of requests for a transfer that are made properly, so you shouldn't get pushback. Hope that helps!
Great video! You have a way of explaining things that makes them so easy to understand. New subscriber :)
How simple and costly is it to transfer the title back to your name for refinancing and then back to an LLC?
Furthermore, given the current high interest rates, would it be advisable to wait to refinance to a lower interest rate before transferring ownership to an LLC?
Thanks for the kind words and for subscribing! 😁
It's very simple to transfer title. You just need to execute a deed in front of a notary and record it with the county. Voila... title transfer complete!
The cost is tougher to say, as that varies locally. In most places, the cost will be quite low -- you might pay a small fee to the notary and then recording fees to the county. There are, however, some instances when "transfer taxes" are due if you transfer ownership. So definitely look into those before making a transfer.
Washington State and most cities charge an "excise tax" when real estate is sold -- usually between 1.5% and 2% of the price. BUT when I transferred title to a rental from my name to my LLC (and back), I was able to fill in an affidavit and qualify for a waiver. Call your county's recorder's office to find out more for your local area.
Also, your loan servicer may charge a small fee to process your request and grant permission for the transfer. One of my clients was charged $100 recently.
If you put title in the name of an LLC, you'll have to transfer it back to your name in order to refinance (generally the transfer has to happen before the application date). If there's no transfer tax in play and the transfer is only $100 to $300, you can just flip title back and forth, as needed.
When you're ready to refinance, please reach out. I'd be happy to help with your new loan!
Hope that helps!
I fund this video and contacted my lender right away to stop him from using my LLC for the mortgage and switch to Fannie Mae. Right on time! Thank you so much. You earned that thumbs up, and I just subscribe. Amazing, this was the first video that I watched from you. :)
You are so welcome! I'm glad the algorithm introduced us and happy to hear the information was helpful! 😁
GREAT JOB and video!
Why, thank you, Cary! Glad you enjoyed it!
Great info. Learned couple of new things despite having read articles & watched related videos (ex: 1031 twist). Thank you!
You're welcome! I'm happy I could add some additional texture and detail to the information you're gathering. 😁
Excellent video. Pls don't make deed changes without consulting an attorney and don't let a cpa or enrolled agent form your llc. Make sure an attorney does it. It's not that much more expensive if you hire the right attorney.
Thanks Michael! And that's good advice... my partner and I have an attorney form our LLCs and handle the annual filing with the state for each. It doesn't (as you point out) cost all that much and there's peace of mind knowing that it's all been done correctly and can serve it's intended purposes should something happen where you really want that liability protection!
Great video, thank you for sharing!
Would Fannie Mae still allow for a transfer if one of the units in the property is owner-occupied? To give some context, the LLC would be under my name (just like the mortgage) and I would stay in the unit for one year after closing on the loan.
Thank you!
You're welcome, Bruno! I'm happy you found the video helpful.
And yes, Fannie's rules don't specify anything with regard to occupancy. So you should be able to secure permission to transfer title to a an LLC even if you are living in the property.
I've had a few clients do this, either because they were living in a multi-family property or because they were renting part of their home through AirBNB and wanted a little extra liability protection.
Are you in the market for a property or is this a home you already own? If you're in the market for a property, I'd love to chat and help you explore mortgage options that'll allow you to use this guideline to your advantage after you close.
Feel free to reach out to me any time at juleef@rate.com or 503-799-3711. 😁
Great explanation on a confusing topic. Thank you very much!
You're welcome! 😊 I am happy I was able to offer some clarity around this subject. It's definitely a source of a lot of questions in my lending practice.
Great breakdown thanks!
You're welcome! I'm glad you found it helpful!
Thank you for taking the time to make this video and share your knowledge -truly appreciate it! If one, meets all the requirements and formally requests a Fannie Mae servicer to transfer the title into an LLC, can the servicer deny the request even though it's in the servicing guidelines? We're in the process of obtaining a loan on a home in NC, per our lawyer it would be easier and more cost-effective to do so at closing however our broker is stating that lenders do not "like" doing so. Most likely, they will be selling the loan right after we close on the house and don't want to deal with the LLC aspect of it. Understandable. However, once we actually have a longer-term servicer in place and the loan is in good standing, can a servicer still deny the right to transfer ? Thank you again and subscribed 🙂
You're welcome, Sarah. I'm happy you found the video helpful! 😊
Just transferring title right after closing still runs the risk of triggering a due on sale clause, as you won't have gone through the proper channels.
So the best practice is to wait for servicing to settle in and request permission to make the transfer from your servicer. The Fannie Mae Servicing guide uses the word "must" when instructing sellers to approve of requests for a transfer that are made properly, so you shouldn't get pushback.
Hope that helps!