Why a trust changes the process
When your home is in a trust, the trust holds title, not you personally. A lender needs to confirm that the trust allows borrowing against the home, who has authority to sign and that the people on the loan are the right ones.
For most revocable living trusts, this is a paperwork step, not a roadblock. It can add some time, so start early.
What the lender usually needs
- A trust certification, or the full trust document, showing the trust's name, date and trustees
- Proof the trust gives the trustees power to borrow and to pledge the home
- Title held in the trust's name, confirmed by the title search
- Trustees who are also borrowers on the loan, in many cases
- Signatures from the trustees in their role as trustee at closing
Revocable vs. irrevocable trusts
A revocable living trust can be changed by the person who created it, who usually still controls the home. Lenders and loan programs commonly accept these when the creator is a borrower and lives in the home.
An irrevocable trust is different. The creator usually gives up control, and the beneficiaries' rights come into play. Many lenders won't refinance a home held in an irrevocable trust, or will ask for added review. Talk with your estate attorney before you apply.
Could you have to take the home out of the trust?
Sometimes. If a lender or title company can't accept the trust as written, they may ask you to deed the home out of the trust before closing and back into it afterward. That can mean extra recording fees, and it's a step your estate attorney should review so your plan stays intact.
Costs to know about
CapCenter offers cash-out refinances with ZERO Closing Costs (restrictions apply), which pays or waives lender, title and appraisal costs when the loan meets the offer terms. Government fees and taxes to record a deed, such as moving the home out of and back into a trust, may be your responsibility, depending on where you live.
How to prepare
- Find your full trust document and any amendments
- Confirm who the current trustees are
- Ask your estate attorney for a trust certification if you don't have one
- Tell your loan consultant at the start that the home is in a trust
