Abby Hackmann handles the marketing work for Trusted House Finance. You can read more of her blogs at https://www.trustedhousefinance.com/blog/
Are you looking to refinance a home that’s owned by a living trust? The good news is that is it possible to refinance the home. It just might take a little more work than a typical home refinance and you must be authorized to do so.
If you aren’t sure if your home is owned by a living trust then it’s best to completely understand what a living trust is before you get started. A living trust is a legal document that protects a person’s home and other real estate assets from probate court. The trust will name the trustee, which will be the person who has the authority to make any decisions regarding the trust and the home.
In this blog, we will help you understand how to refinance a home that’s owned in a living trust and what to do if there are any setbacks.
How to Refinance a Home Owned by a Living Trust
The first step you should take when you’re looking to refinance a home owned by a living trust is to speak with an attorney or financial advisor. They can give you advice on the best way to go about refinancing the home.
If your attorney or financial advisor agrees with your decision to refinance then you will want to reach out to a mortgage company and speak with a lender. Let them know that the property is owned by a living trust and be sure to give them a copy of the trust.
The next step is to ensure the trust gives you the power to take out a mortgage on the home and allows the property to be used as collateral for the loan.
If the trust DOES allow you to take out a mortgage on the property then you will just need to sign a promissory note. This will make the trust liable for the repayment of the loan and the property will be used as security for the loan.
If the trust DOES NOT allow you to take out a mortgage on the property then you can’t sign onto the mortgage. However, if you can still use the property as collateral then the lender will likely allow you to just retitle the property. This means the property will be taken out of the trust and placed under your name so that you can obtain the new loan.
If this is the case, then you should speak with the lender to see if they can complete the deed documents. If they can’t then you should request that your attorney does it for you. Then you will need to send two deeds to the registrar/recorder in your county, The first one will take the property out of the trust and the second one will put it back into the trust.
Right after you refinance the home, make sure that you have the second deed recorded. It may also be in best practice to have your attorney create a warranty that states the home can be used as collateral for the new loan.
Start Your Refinance Today
This guest blog was written by Trusted House Finance, a company that provides personalized advice on mortgage refinancing. Contact us today if you’re ready to refinance a home that’s owned by a living trust. We can help you get the process started and help you get the answers you need.
Keyword: Refinance a Home that is Now Owned by a Living Trust