Posted on: 31st Jan, 2011 05:42 pm
we're trying to refinance two loans on non-owner occupied residential properties and need to find a lender who will lend to an irrevocable family trust, which currently owns the properties. we've searched for lenders who will do this and haven't found any, but some people say there are plenty who do. how do we find them?
Moving an asset out of an irrvocable trust to get a loan will not work if you want to move it back into the trust. That triggers new ownership and calls in the loan.
make it a point to remove the property from the trust. only then the lenders will agree to refinance your loan.
Lenders are wary of lending to trust, but that doesn't mean they can't.
Typically if a lender will or will not do something it has something to do with either their ability to foreclose at a later date if need be, or cost.
For a Lender, taking a mortgage on a property titled in an Irrevocable Trust is like not having a mortgage at all (or offering an unsecured note).
The property may need to be deededout of the trust by the trustees and into the name of someone, be it the trustee or another as the responsible and qualifying party, then refinanced and deeded back into the trust.
Typically if a lender will or will not do something it has something to do with either their ability to foreclose at a later date if need be, or cost.
For a Lender, taking a mortgage on a property titled in an Irrevocable Trust is like not having a mortgage at all (or offering an unsecured note).
The property may need to be deededout of the trust by the trustees and into the name of someone, be it the trustee or another as the responsible and qualifying party, then refinanced and deeded back into the trust.