How to Refinance in LLC

[Kelsey Monell]

I would like to refinance my interest only loan to a conventional loan in the name of my LLC but I'm hearing that can't be done unless it's in my personal name. Why is that? How do I get around that? Seems unlikely everyone refinances in their personal names? Why wouldn't we be able to do it in our LLC?

[Jesse Lynch]

I believe the main issue is that most LLCs have no real credit. I have heard it is a very common tactic to refinance into a personal name, and then move the loan under the LLC name, and while there is almost always an acceleration clause involved in a mortgage, they are rarely called due, because the lenders only care or are even alerted when the mortgage goes into default. I don't work in banking and I am not a lawyer, but I have been told that the acceleration clause being activated is an extremely rare event.

If the LLC has a solid credit history, it's a different situation, but you might be looking at a commercial loan with higher interest rates, etc.  At that point, I would assume it would be a matter of calling around and finding the right lender!