How does a group of people get a mortgage on a vacation home?
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How does a group of people get a mortgage on a vacation home?
I have a group of five people that are
interested in purchasing a vacation
home together. All have great credit
and relatively high income. Do banks
offer mortgages to groups of people
this large? What if we formed an LLC?
Do banks offer mortgages to newly
formed LLCs?
Asked on June 10, 2017 under Real Estate Law, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
For several reasons, including liability protection, you would want to form an LLC and have the LLC purchase the property and get the mortgage. Some banks will offer mortgages to new LLCs without requring the members (owners) to also personally guaranty (make themselves personally liable for) the mortgages; some will lend if the members provide personal guarantees; some will not lend. It depends on the bank and their underwriting (deciding on what loans to make, under what terms) policies, which vary by bank; you may need to shop around.
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