Things to watch out for WHEN TAKING OUT A Trust, Estate OR Probate Loan.
When the time comes for your to take out your trust, estate or probate loan, there are a few things that you will want to consider. If you know what to look for and what to watch out for, you may be able to save yourself thousands of dollars. Trust and Estate loans are specialty loan products products. For that reason, there are not many lenders out there providing them. For the most part, you are limited to receiving this type of financing from a Private Money or Hard Money lender.
Choosing the right private money or hard money lender may save you potentially thousands of dollars in fees and expenses! In almost all cases, Trust and Estate loans are intended to be short term financing options. In simple terms, here is how the trust and estate loan process works when you are seeking one to keep a parents low Proposition 13 tax rate. The Private Money or Hard Money Lender, provides the trust or estate with a third party cash out mortgage. With the cash from the third party loan, the assets of the trust or estate are distributed equally. Taking advantage of the Proposition 58 parent to child transfer, the beneficiary or heir files for the exclusion from property tax reassessment . Once the exclusion is granted, they are then able to refinance or payoff the trust or estate loan with out jeopardizing the low property tax rate that has been transferred from the parent.
Since these third party private money loans are short term loans, many private money and hard money trust and estate mortgage lenders choose to charge prepayment penalties to make additional income on the loan. Worse yet, some trust and estate lenders disguise their prepayment penalty by referring to it as minimum required months payments or minimum interest requirements. Depending on the loan amount, prepaid or required interest charges could add up to several thousand dollars.
Commercial Loan Corporation in Newport Beach, California charges NO prepayment penalties and has NO minimum interest requirements. The also allow clients to pay down the mortgage immediately and will even recalculate the monthly payment based on the new mortgage balance, allowing clients to save on interest payments. If you or a client is interested in a Trust, Estate or Probate loan, you can reach Commercial Loan Corp at www.cloanc.com or 877-464-1066.
For additional information on California Proposition 58, please click here.