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Can an Irrevocable Trust get a mortgage?

Clearwater, FL |

Hi, My folks just passed away and left me an Irrevocable trust. My brother is the Trustee. He wants the IRT to get a condo loan & have the condo titled in the IRT. The IRT would make all payments. My name would not be on loan or title.
Is this possible? My Credit Union said no. Thank-you for your help!

Attorney Answers 2

Posted

Sorry for your loss. To answer your question: Yes, but... Based on my estate planning and real estate experience, lenders do not like trusts, especially irrevocable trusts. Unfortunately, your brother as trustee is going to have to do some searching to see if he can find a lender who will allow you to proceed as such.

Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice.
Circular 230 Disclaimer: Any information in this answer may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

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Posted

As is stated above, most lenders will not consider lending to Irrevocable Trusts and some will consider it, but require a higher level of assets in the trust or other collateral for the loan than what an individual will generally have to post/provide to the lender.

The lenders that will consider lending to an irrevocable trust will look at the assets of the trust and in some situations you can offer to personally guarantee the mortgage or provide some other incentive for the lender to make the loan.

Ultimately you will both have to find a lender who will consider this and meet their requirements for such a loan. Because the options will be limited, you may not find it to be worthwhile to structure it in the manner in which you set up the question. Good luck with your search.

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