Is it wise to use your S-corp profit to pay off your mortgage?

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My boss currently has an s-corp. He bought his house in 2003 and he still owes $ 145K of it. He wants to use his s-corp money as a loan to pay off the mortgage loan then he wants to pay the same monthly payment back to the s-corp until the money is paid completely just so he can avoid the interest rates. Is this wise to do? Or, could it be illegal? Please advise, I am really curious.

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    May 1, 2011 at 6:50 am

    The S corp is a flow though company where the owners are protected from liability. The earnings flow through to the owners of the stock. Legal yes if the sCorp lends for less than the mortgage lender. Wise that depends on how many share holders there are and if all will allow this transaction as they will be taxed as income. With the s corp not registered as a lender they will be doing a contract for deed and holding his home as an asset

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