Assuming a mortgage and taking possession through a trust?
So this is a first for me. A wholesaler in the market where I invest brought me a property in which the current mortgage would stay in place and I would close on the property through a trust. I have used this wholesaler before and often leaned on him for advice. So I trust him. But it is the first time I have done a deal like this. The numbers work. But how does the rest of it work?
1) Can I now communicate directly with the bank about the mortgage since I am the trustee? Can I change insurance?
2) Can I sell the property or refinance the property without going back to the seller/ beneficiary of the trust?
We are using a Title company to close. But I would appreciate insight from those who may have done this or something similar in the past.
Mike
- Rental Property Investor
- Westlake Village, CA
- 767
- Votes |
- 1,398
- Posts
Originally posted by @Michael Wentzel:
So this is a first for me. A wholesaler in the market where I invest brought me a property in which the current mortgage would stay in place and I would close on the property through a trust. I have used this wholesaler before and often leaned on him for advice. So I trust him. But it is the first time I have done a deal like this. The numbers work. But how does the rest of it work?
1) Can I now communicate directly with the bank about the mortgage since I am the trustee? Can I change insurance?
2) Can I sell the property or refinance the property without going back to the seller/ beneficiary of the trust?
We are using a Title company to close. But I would appreciate insight from those who may have done this or something similar in the past.
Mike
You may need a limited power of attorney to communicate with the bank and for insurance matters.
If you are on title as the trustee, you can sell the property, if those powers are granted in the trust document.
Most institution lenders typically won't lend to a trust if you want to refinance. You will have to change title to a person or persons.
If you are buying the property I would imagine that the seller would no longer have a beneficial interest.
-
Broker CA (#BRE01855039)
- Real Estate Group 360
Thank you for your response and insights. The guy who brought me the deal answered the questions along the same lines that you did. He has also done many of the deals. So I am starting to feel a bit more comfortable with it.
Mike