Entity and title sequence

The sequence that causes the fewest problems

1. Talk to your attorney first. Whether an LLC is right, and where, is their question, not a lender’s.
2. Form the entity and confirm it is active and in good standing.
3. Ask your existing lender before you transfer. Most mortgages contain a due-on-sale clause, and a transfer of title can be a trigger under it. What a given lender does about that is between you, your attorney and that lender — ask rather than assume, in either direction.
4. Record the deed. This is a recorded transfer, not a new closing — you are not paying for a new loan. There may be recording costs; your closing agent will confirm what applies.
5. Check that the name matches everywhere — deed, insurance policy, leases, and the account the rent goes into.

What IEG looks at when you refinance

• Whether title matches the application. If the property is held in an entity, IEG writes the loan to the entity
• Whether the entity is in good standing, with current filings
• Who the authorized signers are, documented in the operating agreement
• Whether the insurance policy names the entity — a policy still in a personal name becomes a condition

Common mistakes

• Deeding the property over and never updating the insurance
• Forming the entity but never recording the deed, so title and intent disagree
• Rent going into a personal account after title moved to the entity
• Assuming a transfer is invisible to the existing lender