Hello,
I want to buy a condo for 300K, and pay cash for it initially. Later I want to get a standard 30yr mortgage on it, and put the cash that I initially spent back into my personal account. Here is one solution that I am considering:
I have an S-Corporation, I am the only 100% shareholder/owner, no employees except for myself. I can loan my S-Corp 300K, have my S-Corp buy this condo. Later I can ask a bank to give me a personal 30yr mortgage to buy that condo from my S-Corp. I will have the bank pay my S-Corp the money for the condo. Later I would have my S-Corp pay me back the loan of 300K. Can this be accomplished without paying any taxes? Will this plan trigger some tax event somewhere? I suppose I would need to charge my S-Corp interest on the loaned 300K, and pay tax on that interest. Is there anything else to worry about? Is there anything illegal with my plan? If yes, how to make it legal? My goal is to be able to pay cash for the condo, but later be able to convert it into a standard 30 yr mortgage, and keep the cash except for the 20% down payment. It doesn't seem that the banks at a later time would let me convert to a standard mortgage if I pay 100% cash for the condo. At least, I am not aware of any bank product that would do it. I don't want any home equity loans with some horrible ripoff interests, just normal mortgage. My credit record is excellent. Thank you for your input.