Posted by Mike on July 30, 2003 at 07:52:21:
Based on what my attorney has told me, you’ll need to Deed it back to you, then refinance it. I don’t believe the bank will allow you to take out a mortgage under a landtrust.
Again, you’ll need to double-check.
what’s the effect of a trust on refinancing? - Posted by rm
Posted by rm on July 30, 2003 at 07:19:37:
I’m buying a house that I plan to fix up and keep as an investment.
If I buy it today by having the seller deed to trust and I become beneficiary, what obstacles will I have when, in 3 months, I want to refinance and get some cash out?
Re: what’s the effect of a trust on refinancing? - Posted by Ben (FL)
Posted by Ben (FL) on July 30, 2003 at 11:18:28:
With all respect to Mike’s attorney, he’s not a banker. Chance’s are he’s right, but it’s not a legal issue, it’s an underwriting issue. Check around. I have purchased or refinanced dozens of properties that I held in trust. The only times I have been able to avoid taking title in my own name, then transferring to trust after closing was when the bank was a local bank, it was a commercial loan, and I still had to sign a personal guarantee - although the personal guarantee did not get recorded. Check around, but it’s more than likely you will have to deed it to yourself at or before closing to get the loan.
One last thought, here you have a house, given to you, and the debt does not show up on your credit report. Also, God forbid, something tragic happens to you and you are incapacited and cannot make the payment. I know you will do whatever it takes to make that payment, but when it comes down to it, worst case, the person that deeded the house gets foreclosed on, not you. Are you sure you want to trade your personal security for cash? The more loans you have in your name, the harder loans are to get, unless you know where to go - and I’m sure that statement may elicit some suggestions as to where you can go when you have tons of loan in your name. Just a thought.