Borrowing money as a Trust - Posted by maria


Posted by John Merchant on October 26, 2007 at 13:04:41:

The only way a property can be used as loan collateral/security is by the title owner’s giving a Deed of Trust or mortgage on the property.

So if your Mom is the owner, she’d have to give the D/T or mtg…but if she’s not presently mentally competent, then of course her document would be worthless legally.

I’d advise that your Mom see her Dr. and maybe also her lawyer and get letters from both that she IS mentally competent, then go get the loan in her name, using those professionals’ opinions to get the new loan.

If she’s not presently legally competent, then you could apply for guardianship of her estate and then get the new loan in the name of the legal guardianship.

Your lawyer can help with these matters and should be consulted.


Borrowing money as a Trust - Posted by maria

Posted by maria on October 24, 2007 at 18:57:22:

Hi, my mom’s home is paid for except an equity line of credit.The amount owed approx 50,000. Her home is worth approx 325,000. She is needing assisted living and I want to borrow money on the equity in her home to help finance her care. The home is in a revocable trust. Is this possible?


Re: Borrowing money as a Trust[ee] - Posted by Rick, the Probate Guy

Posted by Rick, the Probate Guy on October 27, 2007 at 14:31:40:

John’s right. You don’t mention what State that your Mom or the property is in, but in California, loans to trusts are available, however they’re neither commonly offered nor priced like conventional loans.

The primary issues will be:

  1. Capacity and powers of the trustee/sucessor trustee of the trust (and the condition of property title at present)

  2. Equity of the real property.

Income and credit may come into play however I’d focus on the above issues if speaking to a prospective lender.

You can find more information on how this work at:

Hope this helps!