Q: I am considering a consumer loan to renovate a house that I own. I am told I have to deed my house to the business and
I must make a statement that I do not intend to make this house my personal residence. This is an interest only loan for 1 year. When I pay this loan off are the terms still valid?
A: I suspect that the statement they want you to sign is to protect the lender from your later claiming the property as your homestead. If you default and they have to sue you and get a judgment against you, a claim of homestead would make it difficult to levy upon the property in order to collect such a judgment. So, once the loan is paid off, the purpose of the statement would have been served. You might, to be totally truthful, give them such a statement indicating that you don't intend to make it your personal residence for the life of the loan.
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