How do banks assess a trust loan application?

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Lucinda
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Joined: Tue Feb 12, 2019 4:09 pm

How do banks assess a trust loan application?

Postby Lucinda » Tue Feb 12, 2019 4:12 pm

Hi Otto, my parents created a trust in my name before they passed away. I am the sole beneficiary and receive a monthly payment from that trust. I’m now looking at my options for an investment loan. How do banks assess a trust loan application?

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Otto Dargan
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Re: How do banks assess a trust loan application?

Postby Otto Dargan » Tue Feb 12, 2019 5:38 pm

Hello Lucinda. Welcome to the forums.

Typically, when lenders receive a trust loan application they will carry out a full credit assessment to decide if they should approve the trust loan. They tend to look for:

  • The type of trust: Trusts are assessed in many different ways. Many banks actually prefer discretionary or family trusts.
  • The trust credit file: The directors and beneficiaries of a trust have credit files and, in some cases, trusts have a credit file as well. Lenders check the file for applications to other banks and any blemishes that it may or may not have.
  • The trust deed: The deed is checked to confirm the beneficiaries and the trustee of the trust and to make sure that the trustee has the power to apply for loans for the trust.
  • The loan structure: Many people take advantage of negative gearing benefits by choosing to have the loan in the name of the trustee or the director of the trustee rather than in the name of the trust.
  • The beneficiaries: Most trusts are set up with more than one beneficiary, and this can make it difficult to borrow money for them as some lenders require all adult beneficiaries to be guarantors. In your case, as the sole beneficiary, this shouldn’t be an issue.

We are specialists in trust loans.

Speak with one of our experienced mortgage brokers by calling us on 1300 889 743 or fill in our free assessment form so we can help you get approved for a trust property loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Lucinda
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Joined: Tue Feb 12, 2019 4:09 pm

Re: How do banks assess a trust loan application?

Postby Lucinda » Tue Feb 12, 2019 6:39 pm

Yeah, that’s fine, my uncle’s the trustee for the trust. So, how much can I actually borrow?

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Otto Dargan
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Re: How do banks assess a trust loan application?

Postby Otto Dargan » Tue Feb 12, 2019 7:40 pm

Hi Lucinda,

The amount you can borrow depends on the lender and the product you choose:


Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Lucinda
Posts: 3
Joined: Tue Feb 12, 2019 4:09 pm

Re: How do banks assess a trust loan application?

Postby Lucinda » Tue Feb 12, 2019 9:01 pm

Sounds good so far. Are there any additional documents required by the banks?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: How do banks assess a trust loan application?

Postby Otto Dargan » Tue Feb 12, 2019 10:24 pm

Hi Lucinda,

There are several additional documents that the bank will need from you in order to process your loan application:

  • A certified copy of the stamped trust deed.
  • A certified copy of the company constitution.
  • Identification of all trustees, directors of trustees (if any) and beneficiaries of the trust.
  • Tax returns and notices of assessment (NOA) for the trust (primarily required for low doc or for new trusts, not always required).

We are specialists in trust loans.

Let one of our experienced mortgage brokers guide you through the process of getting approved for a trust property loan.

Give us a call on 1300 889 743 or fill in our free assessment form.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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