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By the Book

5 Tips on a Faster Close When Buying a Property in a Living Trust

If you’re buying a house and have a Living Trust, you will most likely want the property titled in the name of the Trust. If that’s the case, remember these 5 tips to ensure a faster close.

  1. Have your Certification of Trust ready to give to the lender. This document lets the lender know who is allowed to sign the loan and other transaction documents. Some lenders have their own Certification of Trust Form that they use.  Get that early on, have your client complete it, and send it to the lender.

  2. Ask Lender: If the actual loan amount the same as the amount one the Sales Agreement? If this amount is different than what was stated in the original Sales Agreement, some lenders may require an Addendum to specify the final loan amount. Ask early if they need an Addendum and resolve the matter early on.

  3. You can always put it back in the Trust later – Don’t let financing be delayed because the parties cannot agree on whether the Trust or they as individuals will be named as the Borrower on the mortgage (Hint: It really doesn’t matter). At the end of the day, what’s important is that the property vesting needs to be in the Trust. For most lenders, this is not a problem. Just know that this can always be done after the transaction. The Lender will not be involved with this, nor do they need to be informed of this (they only care about the name of the Borrower).  Don’t let this delay closing on the property.

  4. It’s more efficient and cost effective to create a Living Trust BEFORE buying the  property. They will already have the trust in place, and they can let the Lender and Title Company directly grant property to the Trust, for FREE, instead of spending money to transfer their existing property into the newly set-up trust.

  5. Call MY Attorney who can give you a free consultation.  Yes, I am happy to offering your or your clients a free consultation on embarking  on what may very well be the largest purchase in their life (i.e. how to vest title, whether or not they need a living trust, or need someone to review and update their current estate plan and other fun issues!).

Stephen’s Insight ™ #1 – The Lender is not allowed to ask for the entire living trust, which is your personal private document. They do not need to know how you will leave your property. They only need to rely on a properly executed Certification of Trust.